Setting Up a Retail Store for Success
Setting up a retail store is much more complicated than it seems. For first-time retailers, opening and running an establishment can be very challenging.
When starting a retail business, it’s essential to know what you are getting into. This guide can help explain how to set up your store for success.
Have a Plan
Every business needs a plan, no matter how great the idea is.
Before taking any other steps, such as securing funding or renting a space for your retail store, it is essential to have an in-depth business plan. This goes beyond the surface-level details and includes information about what you will sell at your store and where those items can be found.
Writing a business plan should cover all the aspects of business development, including details such as:
- An executive summary that explains the goals and objectives of the business.
- A description of the company, including the products and services you plan to sell.
- A detailed overview of the products you offer, including both a general overview and SKUs
- A market analysis that includes retail sales operations, economic trends, competitor analysis, and other forms of due diligence.
- An organizational chart shows the management structure and team member responsibilities.
- Marketing and advertising plans
- Funding expectations
- Financial statements and projections
- Other relevant information such as patents and permits
The more detail you put into the plan, the better off both parties are.
If you don’t have a lot of money to invest in your retail store, then it’s likely that you’ll need outside financing. This usually means borrowing from banks or brokerage firms.
When looking for a loan, know exactly how much and what length of time is needed to repay the money. This should be in your business plan and discussed with lenders. Be prepared to tell them how you will use it, like inventory purchasing or marketing.
When applying for a loan, you should also review your credit history to plan accurately. You want to know what kind of terms and interest rates are available.
Secure a Proper Space
When deciding on a physical location for your business, the area you choose can make all of the difference. You should evaluate how far away it is from town and whether there are people who want to visit there to decide if this will be an effective spot.
- The size of your store can be a factor in how much inventory you display. Too small will limit what you sell, but too large may lead to a space that feels awkward.
- The cost of your office space is essential. You can expect to pay anywhere from $10-1000 per sq foot, depending on where you live and the size of your company.
- In addition to a place for customers to shop, you’ll need space for fitting rooms and storage. If your store needs shelving or display cases, these will also be necessary.
- You might find that the space you want is not perfect for your needs. Renovations are expensive, so be sure to research how much they will cost before starting a renovation process and also make sure it’s by what your landlord allows.
- Pop-up shops are a great way to try out different locations without the long-term commitment. They can be a good option for companies who want to test the area before committing.
Acquire Adequate Materials
A lot goes into setting up a retail store. You need to produce, manufacture, or purchase inventory and have furniture and accessories for the interior of your store.
- Shelves, racks, hanging bars, and other places to display inventory
- Hangers, podiums, or other tools for displaying merchandise
- Counters and display cases
- Security tags
- Cash registers and money drawers
- Mirrors in clothing sections and changing rooms
- Shopping carts or baskets
- If you have fitting rooms, be sure to include chairs and curtain dividers.
- Shelving for storage rooms
- Cleaning supplies
- Computers and other stores.
Hire a Strong Team
The right team can provide excellent customer service, help customers make a purchase, and increase the likelihood of making a sale. The wrong people could turn away potential customers by contributing to poor customer experience or causing revenue losses.
When posting job ads, make sure you post in places where your prospective employees will see them. Social media and LinkedIn posts should be tailored for the appropriate demographic.
Hiring is a long process, not just one quick decision. You shouldn’t hire someone if they have obvious red flags or are unwilling to do the job you need them for.
Manage Your Back Office
In addition to the front of your store and on your floor, you need to be aware that back-office operations are just as necessary. The proper treatment of these areas can have a lasting effect on your business’s financial health and sustainability.
Invest in a Point of Sale System
Organize Accounting and Bookkeeping
Without a proper accounting system, it is impossible to know if you are making money or losing money every month.
The process of bookkeeping can be made more accessible by using software that integrates with your POS. This will allow you to make sure everything is up-to-date without manually entering data.
Oversee Your Employees
One of the best ways to ensure that your customers have a good experience in-store is by having an adequately staffed business. It’s more frustrating for them when they walk into a store and find no one there, which can happen if you’re not correctly managing employees.
Identifying peak hours will allow you to see which days and times are busiest so your business can be adequately staffed for high-traffic periods.
Have a Payroll System in Place
It is crucial to find a payroll solution that can generate checks and process direct deposits when hiring employees. It should also be able to calculate the correct taxes needed for withholding.
Track Your Inventory
Tracking inventory is a critical part of any successful retail operation. If you are not monitoring what’s selling, what isn’t, and average turnover or profit margin, then it’s hard to know how well your store is performing. While some data can still be managed by hand, software like this will help streamline internal processes.
Build an eCommerce Presence
Nowadays, it’s easier than ever for retailers to sell their goods online. Not only is this process quick and straightforward, but consumers are using the buy-online pickup in-store option more often than not. 67% of people have used these services before, accounting for 20% of all sales by 2024.
By adopting omnichannel retail software, such as a POS that integrates with your eCom store and updates in real-time, you’ll be able to have product information sync across both channels.
By adding an eCommerce store to your physical location, you can provide customers with a complete experience. Not only will they be able to find and purchase products online, but doing so helps create that “omnichannel” experience for them.
Set Up a Digital Marketing Strategy
Setting up a retail store is the first step, but don’t expect people to come just because you built it.
Put Customers First
When running a store, remember to put yourself in your customers’ shoes. What would you want if you were a customer? Would they greet you when walking through the door or provide compensation for any inconveniences? Good service goes a long way and can lead to 77% more referrals from happy customers.
Final Thoughts on Setting Up a Retail Store
It is easy to stick with the status quo when things are going well. However, keeping a close eye on your business and monitoring analytics will give you an opportunity for success in both short-term goals as well as long-term ones.