Starting A Retail Business
Every day is a new chance to jump up on new business opportunities because of globalization. With continuous improvement in technology, it has now become easier than ever for people to do business with each other. In many instances you can complete a business transaction with people who are halfway across the world from you. Here are a few key points for starting a successful retail business and keeping it on the right track:
If you are thinking of starting a business you should know how to make a business plan. A good retail business plan can help you realize your dream and make your business flourish. It is usually observed that despite having a great startup idea, most businesses are not successful.
According to statistics of IBM institute for business value and oxford economics, 90% of the businesses fail in first five years of operation and out of remaining 10%, only one out of 10 business lasts past the first five years.
Business plans help to find goals and achieve them. Writing down your vision for the company will help you to find it over the time you tend to forget your brilliant ideas. All daily activities of a business can then be aligned with the vision of the business.
A goal without a plan is just a wish. Define your strategy and tactics for execution of special activities including key dates, deadlines, budgets, and cash flow. Never assume that your goals need to be small to accommodate your limitations.
Clearly define your short term goals that you wish to achieve within 12 months, Midterm goals that will take between 2 to 3 years and long term goals. Consider all aspects such as the number of outlets you want, number of customers you need in your database, the target population, and the age group as well as the amount of possible income that needs to be generated in the future.
What is it about you that is different from the crowd? How is your product or service different from the others in the market? It could be anything from additional services to personalized customer services.
Your unique selling proposition will make you more attractive to potential customers. You can even offer them better sales warranty and support. While writing a business plan you just need to highlight the extras your customers are getting from you to make your business stand out.
It often happens that you have brilliant ideas, but someone else has already started a business with a similar plan. You should not let this stop you. Several businesses can provide the same service and still survive as the market place is huge and it can sustain more to more businesses, but for this, you should have a great knowledge of current market trends.
Research and find out how many competitors you have? What services do they offer? What are the current and future trends of the industry? Know the larger picture of benchmarks that can be used to gaze your business performance such as gross turnover, profit margins, etc. Once you know the inner workings of the market you can manipulate them in your favor.
Who will buy your product or service? Who would be your competitors? How much money will you need to start? These are the questions that you must have the answer to.
Name your business and register it. Get the proper business license and permits. Check into your insurance needs. An employer identification number (EIN) is used to identify a business entity. It is required if you have employees in your retail business.
A good retail business should be centered around the innovation of customer’s need and acquisition. Usually, most of the businessman focus on their money making model instead of taking care of customer’s money-making model.
What problems are you solving in your customer’s life which they can’t solve on their own? This should be one of the focus points to consider while starting a business.
Profit and cash are two important key points in starting a retail business. There is no point of having profit in your books of accounts if there is a continuous delay in your cash payments and you are continuously failing to recover money from customers. Most funded startups closed because of negative cash flow. Maintain positive cash flow and recover your payments on time.
Packaging deals with covering a product properly from the viewpoints of safety and ease of handling. Packaging design is more sales driven than any other area of design. While many consumers focus on the features and benefits of a product, the packaging often plays a large role in attracting sales and creating value.
Even if your product is superior in quality it can be outshined by competing products with better packaging. You have to understand that packaging itself is a sales tool. It is all about standing out and making an impression that consumer can’t ignore.
Packaging communicates many things from what the product can do for your customers to your company values. As the consumer moves down the shop, how do we predict which product he or she is going to pick? Hence packaging is the main way products are advertised and identified.
To start a successful retail business you need a strong and dedicated team working on your vision. Team composition, team goals, task distributions, and communication channels are very important for good work performance.
Problem with most of the team members is that they don’t know what they are aiming for? They don’t know how they fit in? They are just following the team because they don’t want to be rejected. The team members need to have a sense of direction, purpose and should know who is responsible for what?
Team members need to know that there are some guidelines, some rules, or agreements that they need to follow. You can perfectly execute your business plan by transforming a number of I’s to We.
In the case of a high performing team, the team leader asks the team to live through the project as a team. Hence, there are better ideas of handling challenges and crucial problems.
Product positioning is what your customer thinks about your product? Therefore, it is important that you understand your target market well. Understand your competition’s positioning. It can help you determine how you can position your own products. See if it is worth for you to expand your business. Is there already a market leader?
Researching your product positioning before starting a retail business will help you stay away from potential landmines.
The only way to grow sales and profits is to create innovative offerings. The goal is not only to find and successfully introduce such offerings but to create barriers that inhibit or prevent competitors from entering.
The firms that have enjoyed years or even decades of life with no or weak competitors have created such barriers. These barriers can inhibit competitors from getting traction, becoming visible, and being perceived as authentic.
The recurring revenue model is one that encourages a customer to pay a certain amount over a specific period of time. It is sometimes called a subscription-based model.
The main elements that business focus on our customer acquisition, the monetization of current customers and customer retention.
When used correctly while starting a retail business, the recurring revenue model has many benefits, including predictable and measurable revenue, access to growth, higher levels of customer retention and increasing profit margins and sales.
The dream of starting a retail business can easily become a reality. It may take a lot of planning as you start your own business, but with the right strategy, anyone can achieve their goals. The above tips to start a retail business should be used as guidelines before you open your store. As a successful retailer always keeps in mind that a successful retail business depends greatly on offering the right product, at the right price and at the right time.