How to Start a Retail Business

By smei

Posted 28/08/18

Many people dream of starting a business and becoming their own boss, but it takes a lot of hard work, time and money. So, in order to succeed it’s important to be as prepared as much as possible. To help you on your way we’ve put together this guide to setting up your own retail business.

  1. Choose your Product

This is 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 start. For example, you might notice a gap in the market; choose a product you’re passionate about or simply decide on a product that you know will sell well.

Here are the types of retail store you could start:

You can also decide if you want a permanent, brick and mortar shop, or you want to dip your toe in the water with a pop-up shop or market stall. These are a great way to experiment with your product(s) and see if you can successfully run a business without committing to too many overheads. A pop-up is also a great way to generate a buzz locally – especially if you want your product to appear exclusive.

And, don’t forget the online market place which is growing rapidly. In 2017, an estimated 1.66 billion people worldwide made a purchase online, spending £2.3 trillion between them [1].  So, if you want to set up an online shop, have a look at our guide to online retailing.

  1. Create Your Retail Business Plan

Having a business plan forces you to consider everything of importance to your shop. It will help you establish the direction of your business and give you an insight into your competitors, target market and customers.

Your business plan should include:

  • Competitor Research
    • What are your competitors doing? How are they marketing themselves? Is there anything you can learn? What could you do better than them?
  • Marketing Plan
    • This is a big area but you can start small by establishing a presence on social media to build brand awareness and show off your products.
  • Customer Experience
    • Why do they want to buy your product? What does a snapshot of their lives look like? How would your product enhance their lives? Answers to these questions will help you with your marketing and help you choose relevant products to sell.
  • Employees
    • This might be a long-term goal but it’s good to establish the kind of people you want and may need to hire in the future. That way you won’t be scrambling around when you find yourself in need of some help!
  • Management
    • This concerns the practical side of things including your opening hours, policies on topics such as customer data and equal opportunities as well as any legalities you might have to address.
  • Financial Projections
    • As things progress this will give you an idea of how successful your business is and whether it’s growing or not. Make sure you set yourself realistic and achievable goals. There are various accountancy software packages available which can help you with this [2].
  1. How Much Does it Cost to Start a Business?

There’s no easy answer to this as it depends on many factors including your goals, location and the type of retail shop you plan to set up. But you’ll need to look at all potential costs to get a good idea of the amount of cash you’ll need. This can be a daunting task and will require a lot of research. Here’s what you should factor in:

  • Expenses
    • Rent or mortgage, utilities and if you have employees, wages too, insurance, business rates, and any finance-related costs you might have. [3]
  • 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.
  • Branding
    • Your brand is part of your identity and 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.

So, make a big list of everything you’ll need to run your business and start attributing costs.

Remember to be realistic with your priorities and question if you really need things. Do you really need a fancy coffee machine for customers to use and a state-of–the-art sound system?

Once you’ve got your final number add a little extra to it as you’ll inevitably encounter unexpected costs.

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

  1. Consider Your Legal Obligations

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

Get to grips with the Sale of Goods Act, the Supply of Goods and Services Act, and the Sale and Supply of Goods Act and review tax and VAT regulations to establish what your obligations are, especially if you have employees. [4]

 

  1. Sort out your Finances

Whilst it’s important to keep a very close eye on all your incomings and outgoings, an accountant might be outside your budget. So do your research and choose some accounting software that you’ll find easy to use. It’ll help save you time and keep your finances well organised!

 

  1. 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 you an insurance package that’s perfect for your business. All you need to do is tell us what you’d like covering and we’ll find and arrange it all for you – and we’re happy to offer advice if you’re unsure. Give us a call on 0330 134 4564.

 

  1. Now You can Focus on the Fun Things

Once you’ve decided on a product, developed your business plan and sorted out funding you can tackle the fun things. What will you name your shop? What do you want the logo to look like? What layout can you use to  keep customers interested and spending the most money?

Starting your own business is an exciting time – but it pays to be prepared!

 

Source

1 https://www.statista.com/topics/871/online-shopping/

2 https://www.thebalancesmb.com/retail-4161588

3 https://www.startupdonut.co.uk/financing-a-business/start-up-costs/q-a-calculating-start-up-costs

4 https://startups.co.uk/how-to-start-a-retail-business/

 

 

Posted 28/08/18

Author: smei

Want more? Subscribe to our bulletin

Log your renewal
Need a reminder?

Fancy a friendly reminder?

If you want one less thing to worry about, simply log your renewal and we’ll remind you nearer the time.

Log your renewal
Latest News
How do you build a cake baking business that counts royals amongst its customers in just five years?

We spoke to Amy Gilmore, owner of Amy Polka Pops in Ribchester, Lancashire to find out.

Read Article
How do you create an award-winning florist that stands out from the crowd?

We spoke to Anthony Cox, owner of Manchester-based – and aptly-named – Flourish, to find out how his award-winning business has become a focal point…

Read Article
How do you take over a small, independent fashion store and transform it into a high street favourite?

Ruth Holden, owner of Kimora Fashion & Lifestyle in Barrowford, Lancashire gave us the inside track.

Read Article
How do you turn a dream into an award-winning micro-pub in less than a year?

Andy Williams, beer enthusiast and owner of The Bow-Legged Beagle in New Brighton, Wirral, took time out to tell us how it’s done.

Read Article
Quotes from well-known and specialist insurers, including