How to Start a Retail Business

By smei

Posted 18/08/21

 

Many people dream of being their own boss, running a business selling products or services they’re passionate about.

But successful businesses aren’t built overnight. It takes planning, time, commitment and, in many cases, finance. To help you, we’ve put together this guide to setting up your own retail business.

What Are You Selling?

This may seem an obvious place to start, but it helps to have direction. There are many different ways to decide on what type of retail business you want to establish. You might notice a gap in the market; choose a product you’re passionate about or decide on a product that you know will sell well.

To give you food for thought, some types of retail business include:

Once you’ve decided on the product or services you’re selling, you’ll need to set out a business plan. This will allow you to consider research around your chosen product, the vision of your business, your target audience and budget information.

Here’s what your retail business plan should include:

Business overview  – a concise description of your business.

Market analysis – look at the market within which your business will be operating. Who will your competitors be? Where are they located, and what are their unique selling points (USPs)?

Who are your target audiences, and what do they look like? Customer profiling is important to understand their behaviours and needs; this insight will make selling to them more accessible.1

 

Products and services – what products will you sell, or what benefits will you offer? Your plan should explore who your suppliers will be. Suppose you are making your own products, who will stock them on your behalf. Don’t forget to include future growth plans to expand your product lines.

 

Marketing communications – how are you going to promote your business and attract your target customers? You’ll need to outline a comprehensive marketing plan, including the channels you’ll use and how you’ll allocate your marketing budget.

Consider your market when setting out your marketing plan. If you’re selling to a local audience, keep your marketing local and relevant. Social media activity presents excellent opportunities to promote your products. It’s also a cost-effective method for sharing your message through word of mouth if you can get your followers talking about you, of course, for all the right reasons.

 

Budget – this needs to be detailed, particularly if you’re looking to secure future investment. Include profit and loss statements, sales and cash flow forecasts, a breakeven analysis, and any capital investment requirements to purchase equipment, stock, premises etc.

It’s essential to keep a very close eye on all your income and outgoings. An accountant might be outside your budget, but there are various accountancy software packages available that can help you with this.2

 

To download a free business plan templete, click here.

How Much Does it Cost to Start a Business?

There’s no easy answer to this. It depends on various factors, including the type of business, its location, whether you have physical premises or focus on online sales. But you’ll need to look at all potential costs to get a good idea of the amount of cash you’ll need. Here’s what you should factor in:

Expenses – rent or mortgage; utilities if you employ staff, wages too; insurance, business rates, and any finance-related costs you might have

Stock – investigate how much stock will cost and set a monthly budget

Equipment – you may need cash machines, a computer, and maybe even secondary office space to run your business from

Brand identity – your brand is part of your identity. It can attract customers, show people what you do and make you appear professional. This could include a logo, website and any other marketing materials you might need.

Make an extensive list of everything you’ll need to run your business and start attributing costs. Remember to be realistic with your priorities and question your purchases. Do you need a fancy coffee machine for customers to use and a state-of-the-art sound system?

Your final figure will help you identify if you need to save more money or approach a bank for a business loan.

 

Consider Your Legal Obligations

If this is your first business, you’ll need to learn what’s expected of you from a legal perspective. This will stop you from falling foul of the law and having your business penalised.

Get to grips with the Sale of Goods Act,3 the Supply of Goods and Services Act, and the Sale and Supply of Goods Act.3 Review tax and VAT regulations to establish your obligations, especially if you’re going to employ staff.4

 

Protect Your Business With Insurance

Insurance can be easy to overlook in the excitement of setting up your own retail business, but it’s very important. And it’s vital that it’s the correct insurance, as getting it wrong could see you overspending, or even worse, being underinsured in the event of a claim.

Instead of offering a “one-size-fits-all” product, we can help by finding a retail insurance package that’s perfect for your business. We’re here to offer advice if you’re unsure.

Starting your own business is an exciting time – but it pays to plan ahead and be prepared.

 

Source

  1. https://blog.hubspot.com/service/customer-profiling
  2. https://quickbooks.intuit.com/uk/industry/retail-business/
  3. https://www.legislation.gov.uk/ukpga/1979/54
  4. https://www.gov.uk/set-up-business
Posted 18/08/21

Author: smei

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