How to start a retail business
Passionate about starting a retail business?
If your idea to start a retail business is keeping you up at night, and you’re ready to leap, what are your next steps? How do you get from the concept in your head to customers and cash coming in the door?
A real-world retail business might have a couple of additional steps and challenges that a purely digital one today, but the current landscape also gives retail entrepreneurs some great advantages in getting off the ground, gaining traction, and keeping customers.
So, where do you start? What’s next?
Research, Research, Research
Before you do anything else, make sure you do your research, and then, put in place a powerful business plan. Skipping or skimping on this step is the number one reason why businesses fail.
Start by talking to your prospective customers. Where are they shopping for these needs now? What’s working for them? What’s not? What do they really want?
Talk to some business advisors. What might you not know that you don’t know? What other questions should you be asking?
Go check out the competition for yourself. How much of it is there? How well are they doing? What are their strengths and weaknesses? What is going to be your competitive advantage?
How big is this market? How big will it be in one year? Five years? 100 years?
What do you really need to make it happen? What specific laws and regulations may govern this industry? What employment laws do you need to meet? What licenses might you need? What taxes and fees will you have to pay to open and keep the doors open?
Craft An Effective Story
If you’re going to raise any startup financing from angel investors to open and carry this business, bring on any partners, be able to charge enough to make a profit, make enough sales and survive, you need a powerful story. You need a brand story that adds a lot of value and compels people to action.
This story may be stuck in your head. It may be really fragmented. You may not be confident in it. Or, feel like you can write it out or explain it well.
Get some help. Get a professional storyteller to help bring out your best story, and make it a part of everything you do.
Create A Pitch Deck
Your next step is to create a pitch deck. Now, you might associate pitch decks with fast-growing tech startups. You may not plan to try to raise any money for your retail business. Create one anyway.
It’s the easiest way to organize your ideas for your business and map out where you are going. It will force you to think it through and ask questions you might have forgotten. It will help you see your business more objectively.
If you do ever need to raise any money for your business, then you’ll already have your deck ready.
This deck can be a great substitute for a lengthy business plan. At least in the beginning. Too many entrepreneurs get bogged down in business plans that they never end up using. They lose all the advantages they had.
You may also want to type up an executive summary, and you’ll need a marketing plan and some form of a budget. You need to know how much money you need to get going and get the results you need to make this a viable business.
How great and successful your business is all really depends on your team. So, go out and hire the best possible team you can. The best in the business. Recruit advisors. Get fundraising and M&A advisor. Or, at least talk to them and pick the one you’ll enroll later – even though it is rarely ever too early to start applying their strategies and tactics for positioning yourself for success.
Incorporate Your Business
You can’t really start doing business or take the next steps until you’ve set up the legal side of the business. Choose a business name, incorporate, get your tax ID number, and open your business bank account.
Location, Location, Location
Success in retail is all about location. There can be a variety of factors that play into the best location for you. Some will carry more or less weight based on your industry.
They can include:
● Proximity to competitors
● Proximity to target customers
● Size of space and scalability
● Whether the area is trending up or down
● Prestige and reputation associated with this location
● Direct costs of rent and taxes
● Other costs, like taxes and licensing fees
● Available talent and employees
Traffic is a big one. How many people can visit at one time? How easy is it for them? How much existing traffic is there? How is this expected to change? There is now plenty of access to data to pinpoint these metrics and determine the real value of any shortlisted locations.
Line Up Your Suppliers
Whether you are bringing in raw material to manufacture or are importing finished goods, you’ll have suppliers. Meet them, make the deals, understand all of your costs, and how they can change.
Before you sign a lease on space, take out a big loan, or commit yourself to a very public grand opening, it is worth testing your retail business idea.
The cheapest way to do this is online. Even if you hope to be mostly selling in-store, this can help you test inexpensively and make crucial pivots and tweaks early.
You can test more accurately with a popup shop. You may be able to do this on your preferred location site to test exactly how much of a winning idea this is and get the proof you need to go all in.
Start The PR Engines
Most of your success is going to rely on marketing and PR. Make sure you have great talent covering this for you.
Social media, press releases, ribbon-cutting ceremonies, and a grand opening event can all be a part of this.
Then, open the doors and start selling.
Alejandro Cremades is a serial entrepreneur and the author of The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide to today‘s way of raising money for entrepreneurs. Most recently, Alejandro built and exited CoFoundersLab which is one of the largest communities of founders online. Prior to CoFoundersLab, Alejandro worked as a lawyer at King & Spalding where he was involved in one of the biggest investment arbitration cases in history ($113 billion at stake). Alejandro is an active speaker and has given guest lectures at the Wharton School of Business, Columbia Business School, and at NYU Stern School of Business. Alejandro has been involved with the JOBS Act since inception and was invited to the White House and the US House of Representatives to provide his stands on the new regulatory changes concerning fundraising online.