Retail Business – The Basics and How to Start One
Launching a retail business can be a smart choice in terms of boosting your revenues. But the road to a successful business is tough and full of obstacles, and it is important that you understand the major challenges as well as the correct approach so that you can benefit most from it.
In this post, we will include all the essential knowledge you need to arm yourself with before you enter the arena of retail business.
Types of Retail Business
There are many different areas in the retail business where you can try your luck, and it is imperative that you have an in-depth knowledge about them before choosing the one where you can excel. Here is a basic overview about the different types of retailers.
- Store retail: This retailing included departmental stores, convenience stores, discount shops, conventional supermarkets and other such huge enterprises that are currently dominating the retail industry.
- Non-store retail: There are numerous opportunities in non-store retail if you do not wish to set up a physical store. You can use print and electronic media, or use the traditional methods of door-to-door solicitation for selling your stock.
- Specialty retail: In this type of retailing, you conduct research about what the consumers want, and sell them those products, rather than stocking up on general products and expecting walk-in customers to buy them. Specialty retail can be done both online and in brick-and-mortar stores.
- E-retail: With the world going digital, having an online presence is necessary for every business. If you are tech-savvy and don’t want a physical presence of your business, then online retail is just the right option for you.
- Mail order: This retailing refers to the selling of goods via mail. The major benefit here is that, like e-retail, you can work from your house. The difference being that you would have to directly mail the sales material to your mailing list in order to convert them.
- Vending machine: This option is the best if you are looking for a low-risk, low-startup-cost business. You may not even require any workers for it.
The Six Steps to a Retail Business
Once you have decided what products you want to sell and which type of retail store you would be comfortable with, look over at these six steps to retail business.
1. Name your business
Your business should have a name that customers can identify you with. However, you also need to confirm with the Secretary of State if the name that you have chosen is not already taken. A good practice is to think of a set of names and choose from the ones that are available.
2. Research your competition
Your competition would be the standard that you need to meet and exceed. Find out what your competitors are doing, what techniques work for them and what doesn’t, and craft your strategy based on the information you glean from this research.
3. Research the laws
Depending on the type of products that you are selling, you need to research the laws relating to it, or ask the help of a business lawyer. They would be able to guide you through each step of the way so that you don’t miss out on the compliance of any laws.
4. Choose your business structure
Although the most common legal structure in retail is an LLC, you can also opt for other options such as a corporation, an S-corporation, a sole proprietor, a partnership or a non-profit. It is important that you understand the taxation and liability rules for each of these so that you can make an informed and educated decision about your business structure.
You need to streamline your finance matters such as locating relevant funding, settling on a profit margin, etc. You would also need to open a bank account for your business.
6. Create a business plan
In order to launch a retail business successfully, you need to create a meticulously crafted business plan. A business plan acts like a structure that lets you know the proper hierarchy and the roles of every individual involved in the retail business. It also includes the milestones and goals, and can act as a management tool to help you allocate resources optimally.
You may have multiple ideas about your business operations, but if you don’t put it in writing, there will be nothing to refer back to. Generally, these are the key features that need to be addressed in a business plan:
- Customer experience
- Employee plan
- Financial projections
- Management plan
- Marketing plan
- Your business competition
Need More Help? Talk to a Lawyer
Talking to a business lawyer can help you kick start your retail business without facing the usual struggles typical to that of a new startup. A reliable lawyer would guide you through every step of the way, and leave you in a secure position to rake in revenues from your retail business. To learn how else a business lawyer can help you establish a successful retail business, get in touch with us.