Are you thinking about opening a retail business? 2021 may be one of the best times to open a retail store!
FastCompany.com points out that “interest rates are as low as they’re ever going to get. Millions of people are looking for jobs, which means the labor markets are abundant.”
Storefronts are available that were left empty by shuttered restaurants and retailers that decided to close. Now is the time to think outside the box and negotiate a lease that will help you make money. Many years ago, a store consultant told me, “You think you make your money from your sales, but where you make your money is in your lease.”
Tom Ryan with Retail Wire writes the “benefits of starting a business during a downturn include less competition, access to a wider pool of talent and cost savings on everything from financing to construction, rent and hires. Publicity is also easier to find as the news outlets are hungry for feel-good stories.”
Consumers will be ready to get out and experience life again once the vaccines are given, and the virus is under control. Many studies are predicting that by the 3rd quarter, we should see a transition toward normalcy. Now is the time to be making your plans if you want to open a new retail store or overhaul your current business. You have a lot to do!
Here are 5 Things to Know about Opening a New Store (or Overhauling your Current One)
#1. Write a Vision and a Business Plan.
This is where your dig deep and write out your dream. What is your ‘why’ for opening a store? Who is your customer, and how are you going to serve them? What is the look, feel, and design of the store? What products will you carry? Your store’s name needs to be recognizable and easy to say, and then you need to design a logo for your brand. Write the Mission Statement for your business and the Core Values. You need to put some deep thought, research, and planning into your business start-up or the revamp of your current business, and it all starts with you and your Vision.
Need help creating your vision? Read our blog How to Create a Vision for Your Life and Business.
#2. Build a Team.
You need to surround yourself with mentors, trusted advisors, and skilled professionals to coach and advise you along the way. Consult with lawyers and accountants to set up your trademark, financial projections, and determine how to best set up your business’s legal structure. Get with your banker to set up the financing, bank accounts, a line of credit, and more. You will also need to work with your insurance company to cover the business. It is best to set up a great team initially, so you are set up for success. Otherwise, you may find yourself 3 to 5 years later needing to find good people to help dig you out of a hole.
#3. Location, Location, Location
When I was in the College of Business at the University of Georgia, I remember being taught that 3 of the most important factors to consider in business are location, location, location. Do your research! Determine your strategy for where your store needs to be located to reach your customers. Contact a commercial real estate agent for help with this. You will need to share your design and aesthetic ideas from your Vision with the agent so they can best help you find what you are looking for. Have a professional business consultant or a lawyer assist you in understanding the lease negotiations. Remember what my business consultant taught me, this is where the money is made.
#4. Do Market Analysis
Determine your niche. What product categories will you carry, what services will you offer? You need to do lots of market research into your product selection, sourcing, and buying. By searching keywords on the internet, you will find lots of information. Seek out trade publications and associations within your industry. Reach out to vendors and attend trade shows or markets that are appropriate for your brand. You need to know all that there is to know about your industry and the products and services available in your surrounding area.
#5. Hire a Coach.
Once you have written your Vision, gotten your financing, signed your lease, purchased all of the products, and are ready to open your store, you are only ½ way there. You still need to work on your operational systems, policies and procedures, marketing, staffing, and more.
Here are just a few more things you will need to figure out while trying to open your store.
- a point of sale system
- payroll system
- recruit, hire, and train staff (including the employment application, interview process, discipline & termination process)
- website & social media sites
- accounting software
- markdown process
- gift cards
- how to receive inventory
- cash drawer balancing procedure
- return policy
And that is just naming a few! If all of that sounds overwhelming, I want you to know that it can be done. As my aunt always said, “You can make your life easier, or you can make it hard.” I recommend hiring a coach for at least a few months to help you walk through this entire process and make your life a little easier. Or go it alone and make your life hard. It is up to you.
Don’t believe me? Watch this video with some advice from new store owner, Lindsay Letourneau, that opened her doors on Nov. 27, 2020. After a couple of months in business, she is still smiling and has learned a lot!