Start by Formulating a Business Plan
So you’ve decided to take the plunge and open your own business. Congratulations! Now, it’s time to start formulating a business plan. First, you’ll want to start your all-important paper trail and planning with competitive market research. The best strategy is to find a market gap to fill and build your business around it. Carving out a niche for your retail store helps differentiate your business from the competition. Once you’ve identified unmet needs, you can determine which products and services your retail store will offer to meet them.
The next step in opening a retail store is to write down your company’s mission and objectives by writing an executive summary and drafting a value proposition to communicate your business’ unique attributes. This is a vital step. Formal statements on the principles you base your business on and the value you provide to your customers will set a clear path for your business to follow, from how you brand your retail store and how you manage it, to how you staff and market it.
Additionally, once you’ve created an executive summary and value proposition, it will be easy to determine which business structure your business will fall into. Determine if your business is a sole proprietorship, partnership, or corporation. Having these prepared is an essential part of your business portfolio which benefactors like banks and business partners may request.
Draw up a Financial Plan
Here’s where those benefactors and investors we just mentioned come in. They won’t invest without a financial plan, but creating a financial plan requires experience. If this isn’t within your areas of expertise, it may be necessary to hire help in your planning phase from accounting or finance professionals. Start your financial planning by estimating the preliminary projections for the revenue and expenses of opening a retail store. Based on those expenses, draw up a financial analysis Your analysis should be based on similar established business data and should include:
- Balance sheet
- Cash-flow analysis
- Profit-and-loss analysis<
- Break-even analysis
- Personnel-expense forecast
One of the most vital estimations from this analysis is your break-even point. Once you have determined these crucial forecasts, it’s time to explore your financial investment options for starting your business. There are three ways you can finance your business:
1. Personal Savings | 2. Secure a Loan | 3. Seek Investors
If you choose to pursue a loan or find investors to help finance opening a retail store, it will be vital that your business plan and financial analysis are thorough and well written. To wrap up your financial planning, you will need to set up business bank accounts. Having a dedicated business account will make it much easier to track expenses and income, which will help you stay on track financially. Plus, you’ll have an easier time filing your taxes. Additionally, you will want to acquire a business credit card. This will help pay for everyday business expenses and keep personal vs. business transactions clean. Finally, you will want to purchase business insurance before establishing your business.
Secure All Permits and Licenses
The next step in opening a retail store is to acquire the necessary licenses and permits for your business. Start by registering your business. You can simply file the required paper online or at a local government office for most small businesses. This will register your business name with state and local governments. In Canada, registering your business at the federal level is also a simple process that can be done in person, by mail, or online. The cost of registering your business will vary based on the province you’re in and your business structure.
Once registered, you can also start applying for business licenses such as a sales tax and resale licenses. You can also start collecting the specific permits your business may need, such as :
- Food premises inspection
- Alcohol license or permit
- Signage permits
- City or county business license or permit
- Doing Business As (DBA) registration
- Fire department permit
- Health department license
Scope Out and Select a Location
Location, location, location! You’ve heard it time and time again, the right site for opening a retail store can make or break your company. To start your location hunt, consider your retail store’s type or concept. For example, will your store be brick and mortar, eCommerce, or an omnichannel mix of the two? How customers will interact with your business will affect the best location for it.
For example, if you select a brick-and-mortar business, you will need to evaluate foot and vehicle traffic. Depending on your business, you’ll want to ensure there is the right balance between the two. If you are unsure of a location, look at the history of previous owners and how successfully they operated there, and the current success rate of businesses around it.
Once you have determined the best location for your business, you will need to compare the cost of rent vs. mortgage in the area and compare utility costs on different properties. Finally, you will need to secure a lease or buy an existing building and determine the company’s parking needs.
Brand Your Business
If you didn’t have our opening a retail store checklist, this is probably where you started. A business’s brand is a big deal, so it’s essential to create one that is unique and represents you and your business well. First, decide your store’s name. Whether you come up with something unique and hip or straightforward, you will have to check and ensure the name is not taken by another business. Once cleared, you will need to register your new business name.
Next, you will need to start developing a brand persona, aka the personification of your company: its goals, how it wants to present itself to customers. Once you know how you want to present your brand, you will have to bring it to life and make it identifiable. Hire a graphic designer to create a logo and branding guidelines, along with branded design elements your business may need like:
- Website/eCommerce site
- Social channels
Once you’ve established a clear brand, you will need to develop a marketing plan with an estimated date for your business’ opening. Your marketing plan should cover details like who your target market is, a restatement of your business or product value proposition, the campaigns that will be used to draw attention, and the metrics to assess your marketing initiatives’ effectiveness. You will also want to invest in a website domain to get a website live and start working on social channels, especially if you plan on operating an omnichannel business.
Create Your Store Layout
Once you’ve landed the perfect location for opening a retail store, it’s time to start setting up. Start by researching the best product placement and store footprint for your products and services. A lot of psychology goes into designing a store layout, which is why it’s important to do your research and see which is right for your business. For brick and mortar, there are three main options you can choose from: a loop or race track, the Grid, or free flow.
Once you select a layout, there are several other layout and design aspects you can put in place to boost sales. For instance, install carpeted areas to break up tile floors where you want customers to slow down and look at merchandise. Or, put your in-demand/ seasonal or high-value items on the right of the entrance (where most customers start shopping).
When creating your floor layout, try to create an iconic space. Use your brand persona and branding guidelines, so your store feels consistent the whole way through. Match your brand colors with displays and other aspects of your space like:
- Clothing or display racks
- Display cases/Rotating Racks
- Mirrors or Mannequins
- Shopping carts/baskets
- Product or shelf labels
- In-store signage (aisle markers, open/close, wet floor)
Choosing technology to help you manage and operate your retail store is an important decision. The right retail technology can streamline operations, automate routine tasks, and help you create great customer experiences. On the other hand, implementing the wrong technology can stand in the way of efficient operations and growth.
Start with the most important technology you will need to run a successful business, a point of sale (POS) solution. This technology is vital because not only is it the way your customers complete their shopping experience with a payment transaction, it is also the hub of your business management. POS systems are software programs that bring together sales and retail transactions with inventory and other business management tools, so everything a retailer needs to manage their business is under one streamlined platform.
With so much riding on your choice of POS systems, carefully weigh your options by evaluating these features:
When you’re opening a retail store, you need to find a POS system that has the features you need but is still within your budget. That’s why ClearTEQ makes a point to provide customers with dependable and affordable POS solutions. The team ensures that you are informed every step of the way from your initial purchase, merchant services, and technical support. You need to be sure that rates are straightforward and you won’t uncover any hidden fees.
Ease of use
Here’s a no-brainer, you need a POS system that is intuitive and easy to use. By selecting a system designed with your checkout workflow in mind and easy-to-ready interfaces, you can spend less time training employees now and in the future. Additionally, optimized workflows and POS system screens allow employees to quickly scan through items at checkout minimizing lines and providing better customer experiences.
Supply chain issues have put inventory management at the forefront of business owners’ thoughts. Get a POS system that makes monitoring inventory with live data updates easy. See how your inventory levels are doing and order in-demand supplies early. Advanced inventory management can ensure your store shelves stay full and reduce stock-outs.
Customer management tools
It’s about 5x more expensive to bring in a new customer than to retain an existing one. With easy access to a wide variety of stores, customer loyalty is becoming rare, and establishing a loyal customer base is more vital now than ever before. You need to select a POS solution that makes it easy to manage and market to your customers. Your customer management tools should be integrated with your POS system to send promotions, track past purchases, and create customer profiles easily.
Setup and installation
The last thing you want is for software to be the anchor dragging your small business down. That’s why you must work with a company with local team members who are ready to work with you to set up and install your new system. That’s why it’s critical that you purchase a POS solution that minimizes downtime. From installation to follow-up IT assistance, you want to work with a company that prioritizes your company and will connect you with dedicated team members, not service robots.
A ClearTEQ POS solution is easy to set up. Between the quick setup and ease of use, you can rest assured knowing your new technology won’t be the bottleneck to getting your business off the ground. With our easy setup, it’s never been easier to upload your product database, log inventory, and enter prices. Plus, you can easily create and manage profiles with our vendor and employee management features.
Other vital technologies you need to accompany your point of sale solution to complete your check out counter are:
- Computer or tablet
- Barcode scanners
- Receipt printer and paper
- Payment processing system
Once your POS and checkout are set up, you should also consider additional IT solutions such as:
- Video surveillance equipment
- Internet and other IT requirements
- Television and cable/satellite options
Establish Best Practices for Operations
While working on the other aspects of opening a retail store, you should also be diligently establishing an operations and management plan. Your plan should cover things that are critical to operations, such as your business’s physical location, labor, facilities, equipment, and processes. Establishing a management plan is just one aspect of your business operations. The next step to opening your business will be hiring.
Hire The Right People
Navigating the process can be intimidating if you haven’t hired an employee before. Start by making a list of all roles your business will need and the volume needed per shift. Go through each position and create job descriptions. Once these are well-developed, start posting the jobs on the company website and other hiring websites. Once you have reviewed and selected some candidates, you will need to set up and prepare for interviews. Lastly, have a plan in place for when you find the right candidate and offer them a job. Keep your new hire satisfied and performing well with a thought-out training program. Also have a plan in place for managing payroll, benefits, scheduling, and other HR activities.
A vital part of your operations will be securing a vendor and retail supplier. Once you have started scouting potential vendors and suppliers, make a plan that lays out how you will work with them to ensure that transactions are efficient and profitable. Then, to narrow down your options, establish a supplier budget, ask for samples from each vendor, and research vendors’ reputations. It’s also wise to have tier 1 and tier 2 suppliers that you use most regularly as well as tier 3 or 4 suppliers you can turn to during supply chain issues, such as the challenges retailers faced in the early 2020s.
Once you have selected your vendors, create a good working relationship by setting clear expectations from the beginning. Communicate your inventory needs and if something goes wrong, address it with your supplier immediately. Also consider back stock shelving, shipping materials and creating a shipping account so you are ready to receive stock and serve customers.
Ok, you’ve done all the groundwork, and it has led to this—the grand opening of your new retail business. Pull from your marketing budget and plans to promote your brand and its upcoming launch. Once you’ve started generating buzz, prep your store with a deep clean and start stocking and displaying your best inventory. Then select the date for your big day and promote with further announcements.
Just because your big day is here, it’s not time to rest. Instead, host the grand opening and wow your new customers. During and after your event, be sure to collect customers’ thoughts and reviews.
Use the feedback from customers to adjust and reassess your setup. Then run to your POS system and enter and define your key performance metrics. Once you have established those in the POS system, track and analyze sales data. The first few weeks after your grand opening will be vital to creating a solid foothold for your business. Keep track of your sales data and performance metrics, and be prepared to analyze and adapt and make adjustments as needed.
We know that was a lot, but if you made it through to the end, then you’re on the right path to opening that retail business. For a free, downloadable checklist to help you organize opening a retail store, click here.
Our team at ClearTEQ prides themselves on providing the best POS system for small retail businesses. Contact us today if you are ready to work with a local team member and set up your POS system for your new business!