BY: IPINMI AKINKUGBE
What is a retail business?
Think about your everyday life, shopping in the supermarket, clothing store or pharmacy. All these are retail businesses and are a crucial part of the supply chain since it links manufacturers to the end customer.
Retail businesses bring ease and convenience, providing products and services through either a physical or online store. Retailers are filling a gap and serving a need with their products/ services.
Now you know what a retail business is and its importance, here is a detailed 10 step plan for you to follow if you are considering starting your own business. The steps are not in any specific order so you can work through them in whatever order makes sense to you.
How to start a retail business in 10 steps
Select your niche
Narrow down the market you will be serving, the products and services you will be providing and who your target audience will be.
Having a niche gives businesses the unique opportunity to stand out above the market noise and differentiate offerings from competitors and focus resources on creating the best solutions for target audiences.
To find your niche:
- Discover your interests: what do you love doing and could possibly enjoy selling.
- Research your competitors: do a deep dive into your competitors, find out who their target audience is, their niche and their offerings. This will help you get an idea of what the market wants and what you can do to fill the gaps in your competitors' offerings.
- Think about profitability: does your chosen niche have a large demand base? Ensure it is profitable.
Build a business plan
The first thing anyone starting a business should do is develop a business plan. It is a document that details everything about your business. It gives it a structure and direction and serves as a road map for future activities.
In a business plan, you are able to highlight your business model, offerings, business goals, mission & vision, target audience and how you plan on making money.
A business plan is crucial because in the long – run when you are seeking funding for your business, this document will provide a comprehensive overview to interested parties. When developing a business plan ask yourself these questions:
- What is your product/ service offering?
- Who is the target audience?
- Will you have a physical or retail store? Or both?
- Who are your competitors and how can you set yourself apart?
- What will start up costs be?
- What are your financial projections?
Source inventory from suppliers
Your vendors/ suppliers are one of the elements that could make or break your business. Your relationship with them impacts your ability to fulfil customer demands. When choosing your suppliers, use these criteria:
- Location: how far are they from your store location – if you have a physical store?
- Delivery time: this needs to be as short as possible. You can never be low on inventory or you run the risk of losing business to competitors.
- Budget: your suppliers need to be able to work within your budget.
- Quality: quality merchandise is of the utmost importance. Giving your customers subpar items is not an option.
- Customer service: your supplier needs to be easily reachable, reliable and personable. This is what makes the customer experience.
Make sure you have multiple suppliers, this way if anything goes wrong, you always have a contingency plan.
Register your business
It is time to make things official now that you have chosen a niche and created a business plan. Choose and register a business name.
When choosing a business name, make sure it is something that properly translates the essence if your business. It should reflect your business purpose & identity and allow room for growth. It should not limit the business and most importantly, it needs to be available.
Once you have settled on a name, do your research to make sure it is available. The next step is to buy a domain and build your online store.
- Business legal structure
This determines how your business is structured in the eyes of the law. It could be a sole proprietorship, partnership, corporation, cooperative or Limited Liability Company (LLC). The structure determines the life of your business, how it is taxed, how much legal protection you can get, funding options and ownership structure.
This step is very crucial, so if you can, consult a legal or business expert before making your decision.
Secure physical store & build an online store
- Physical store
If your business model includes a physical store, finding the right location is one of the most important steps in this whole process. You should pick a location close to your target market with high footfall.
It needs to be as convenient as possible. If it is hard to find, close to construction zone or has limited parking it could hinder the success of the store.
- E – commerce/ Online store
Even with a physical store, an online store helps increase visibility and give the business as much exposure as possible.
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You will need to separate your personal and business finances. This way, you do not dip into your personal account to fund your business. Do this at the very beginning, it will make tracking your business income, expenses and revenue easier and keep you on track financially.
It also helps legitimise your business and ensure you are complying with any applicable laws.
Get funding for your retail business
Businesses need a lot of money to get off the ground especially if it includes a physical store. There are a lot of start-up costs to contend with including; rent, design, advertisements, staff salaries and inventory stocking. Altogether, it is quite expensive and will require a funding source. This can come from:
- Small business loans: from banks however, the problem with this option is the high interest rates. This is what makes loans a less than attractive option.
- Investors: this option has the benefit of no interest rates, but it is more difficult to acquire this type of funding. You need to ensure your business is always profitable so your investors get returns.
Hire competent staff
Your employees are the first introduction a customer has to your business. They are at the front line and so need proper training to effectively market the products. Therefore, it is more than necessary to take the hiring, onboarding and training process seriously.
Market your retail business
Now you’ve made it to the end and have built your business. The natural next step is to market it to get it in front of your target market. Marketing your retail business is incredibly important for a variety of reasons.
It helps to create awareness of and interest in your brand, products, and services. It can also help you reach potential customers, build relationships with current customers, and increase sales.
Furthermore, marketing can help you build a positive reputation in the marketplace, which can benefit your business in the long term. In short, marketing your retail business is key to helping your business grow and succeed.
Plan a grand opening
A new retail business needs to be unveiled. This does not mean you need to spend excessively on planning and execution, but it needs to make a statement. Planning a grand opening for your new retail business is a great way to create a excitement and make a lasting impression on potential customers.
A grand opening event can help introduce your business to the community and give customers a chance to experience what you have to offer. It’s also a great way to build relationships with customers, vendors, and other local businesses, and establish yourself as a key player in the market.
It is an opportunity to show off your unique products and services, as well as demonstrate your commitment to customer service. You can also use the event to promote special offers and discounts, which can help draw in more customers and generate more sales.
With careful planning and thoughtful execution, a grand opening event can be a great way to kickstart your business’s success!
The bottom line
After going through all 10 steps, you have a fully-fledged retail business existing both online and as a physical store. The next step is to continue on your trajectory, never lose sight of the goal.
If you remember what inspired you to start the business, even the more tasking steps will feel worth it in the end. Additionally, always remember and ensure at all times that you are fulfilling the needs of your customers and providing them with value.