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Wednesday, December 17, 2014

Opening a retail store: 5 things to know and remember

By David Woodburn

So you have developed and marketed a new widget and things are taking off. You have been building your own business out of your home office or your garage or basement or whatever. And maybe your marketing has been highly successful where your widgets can’t stay on your shelves and your house and neighborhood are being inundated with traffic of enthusiastic customers.

At this point, you could well be thinking, this can be a good time for me to find a retail space to sell my widgets. And you could be right, but you can’t just spontaneously call up a commercial real-estate agent and have them immediately find you a space to lease so you can clear out your garage and thin out the neighborhood traffic in the next month. Opening a retail store is a big decision and there has to be a lot of things to consider, think about, research and understand. You do not want to go into this kind of operation blind or ignorant. That alone will cost you the business before you even open the doors for the first time.  Since you are supported in your efforts, here are some things for you to consider and keep in mind not only as you open your store but also to keep your store profitable.

Have a plan

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1. OK, if you’re smart (and if you have a business, you are definitely not stupid), you already have a business plan. And it’s possible that a retail space was featured somewhere in that plan. Well, now you have to not only review the plan as a whole, but you should also create a plan inside the plan that deals specifically with the retail space. This includes doing some market research to determine if your desired market can support a retail space for your widget. This will also include looking at the demographics of your market and seeing whether your widget can get some penetration in the market according to the desired or target demographic.

Know your customers

2. This isn’t just on first-name basis. This is about knowing their backgrounds, spending habits, why they buy your widget and why they come back, and also knowing their age, location of residence and other key marketing information. Knowing as much as you can about your customers will help you market more effectively, and ultimately can help you with the fourth thing on this list – you can make more sales if you are closer to your customer base.

Start slowly

3. This is more of a reminder for you. You likely started slow in the first place – that is why you made your widgets in your garage. Moving into a retail space does not mean it’s full speed ahead. You should probably dial back your expectations and think of your retail space as another “garage.” Build slowly and don’t bite off more than you can afford to chew, if you get the drift. 

Location, location, location

4. Especially if you are opening only one retail space, picking the right real estate could make or break your operation regardless if all other factors are in place. The keys are to know where your customers generally come from and find a location that is as central to that group as possible, and it’s probably a good idea to find a space that is along a visible and well-traveled roadway to increase visibility. You can also determine in your business plan whether it will make sense to lease or buy an existing space, expand or build out a space or to build a new store.  Of course, which you choose will likely have a bearing on the permits and licenses you need in order to operate, so that should be put into the equation as well. The most visible you are, especially with signage like that from Industrial Sign Installations, the better you will be in the long run.

Find the right people

5. Once you have your plan and your site ready to go, you will likely have to hire some people to run the store with you. And really, no matter what role each person has in the store, good customer service will go a long way toward your success. It’s one thing to hire people with the best skills for the job you want to fill, but if that person does not know how to handle customers and meet their needs, those great skills will be on the streets when you shutter your doors.  And when you find the right mix of skill and personality to meet your customers’ needs, you will have to have considerations about the salaries you offer and if you offer benefits. You will be in competition for the workers just like you are for customers, so you have to make sure you can compete with other businesses in the compensation area. On the other side, you need to make sure to develop a strong and thorough interview process so you find the truly good people, and not just able, breathing bodies. There needs to be a fit between you and the candidate not just in terms of how the candidate is better at a skill than you, but that he or she gets along with you and the culture you want to project in your retail space. 

About the author: David Woodburn has been working in retail for the past several years and has a lot of knowledge when it comes to finding your perfect retail space.

Image: GifTagger, US-PD