Being your own boss is everyone’s dream. However, it isn’t as easy as it is perceived to be. Having your own business and more specifically, setting up a start-up, is a risky task. You never know whether you will be able to enter the market successfully, reap profits and cover the sunk costs made in the start-up. It requires a lot of contemplation and well-weighted judgment to invest your hard-earned money in a setup that gives you no guarantee of being a success.
Retail businesses work by purchasing goods in bulk and reselling them at a profit. You must maintain large amounts of inventory, a physical store and the right machines to manage the huge inventory such as the equipment offered by Sky equipment.
The retail business can reap a huge amount of profits if operated smartly. But like any other business, a retail setup also has certain inherent risks attached that might challenge your profit-earning strategies. In the read ahead, we are going to mention five crucial things to know before opening a retail store.
- Know Your Cashflow:
First and foremost, when starting any kind of business, you need to be well-aware of your cashflows. You need to have a clear picture of the amount of money that would be needed for your initial fixed expenses and the amount of cash that will be required daily to run the business. Also, you need to have a basic projection of the initial sales and revenue you expect to make from the start-up.
However, even though budgeting projections is the right thing to do, expecting your business to start earning revenues the day it is inaugurated is unrealistic anticipation. The majority of well-established retail stores today initiated as small-scale businesses. You will need to build a brand image and earn the confidence of customers before they start buying from your business. Hence, it is crucial to realize that you need to have enough money to sustain your businesses’ daily expenses, even when your investment will not be earning you any revenue.
- Be Aware of Your Goals:
Before investing a huge sum of money into a start-up, one should be sure of the objectives the business is supposed to meet. This objective is what is defined in the mission statement.
A mission statement is a short declaration of the purpose of the organization, the reason it exists and an explanation of its goals. The mission statement also gives a brief account of the type of products or services the business would be dealing with, the market it plans to aim and its geographical location.
A business has several different objectives that the owners aim to achieve apart from earning profits. An example of an objective could be to keep the customers happy by providing good quality products at low prices.
Going through the mission statements of your competitors in the market can also give you an overview of their aims and objectives. Try keeping your statement brief, precise and easy to follow so that it stays with you on your journey of operating the business in the future.
- Create Your Brand Identity:
Brand identity is what consumers use to identify you from all the other businesses in the market. It is obvious to say, for an organization to be established, there needs to be a unique name and a logo that can be used by the customers to distinguish the brand. Hence, putting in efforts to come up with a unique brand name and a catchy logo needs to be the first step.
The brand name and logo are going to be crucial in building your brand identity. Therefore, it is very important to choose those that can be related to the overall business image and ideology.
Moreover, drawing out one core value or feature of your business and using it as a tagline creates a lasting impact on the customer’s brain. An example of a catchy tagline would be McDonald’s, ‘I’m Lovin’ It’. Taglines are memorable phrases that have the purpose of making the customers remember the brand.
- Building Brand Awareness and How it Boosts Sales:
Brand awareness is creating recognition of a new product or an existing product among the consumers. It is considered a vital part of marketing a business and influencing consumer behavior. Brand awareness is significant in inducing the decision-making of the customers to purchase your product or service.
For start-ups, creating a brand image is very important. Being a new name, penetrating the market, making a significant place and earning the confidence of the customers is a complicated and difficult journey. Creating a good reputation and impression is vital for a successful business.
It is common sense that the better the reputation of your product or service among the consumers, the more they will purchase from your business. Thus, an impactful advertising campaign and marketing strategy must be developed even before you start up the retail store.
- The Importance of the Right Location:
One thing that is usually not given much attention when starting up a new business is choosing the location. We often go with our instincts without putting in much analysis and ignoring some important factors which might affect the success of our business in the long run.
Choosing the right location can have major impacts such as the number of sales your business makes by ensuring that the right customers have easy access to your store.
Also, choosing the location can have an impact on tax laws and other regulations. Often the incentives provided by governments for small scale enterprises or new businesses differ according to the regions. Also, tax law may vary based on your geographical location. Therefore, picking the right location that merges well with your financial plan is mandatory to guarantee a successful business. Try using a Google maps radius tool to estimate the size of your sales territory and calculate the profitability based on the density of foot traffic within your store area.
Starting up a retail store or any business for that matter is not a piece of cake. It requires a well-researched, thoroughly analyzed and detailed plan for any start-up to gradually pave its way towards success. Keep in mind the above-mentioned pointers and turn your start-up into a successful retail business!