This may be the best time to open a retail store.
Since the COVID-19 pandemic began, the U.S. Small Business Administration (SBA) has released plenty of attractive retail business loans for new entrepreneurs. These kinds of special incentives will undoubtedly encourage new business owners to set up shop across the country.
However, these first-time business owners can’t hope to open a successful business without following a growth path.
This begs the question — what path must your new retail business follow to improve its chances of success?
Fortunately, as an industry-leading retail point of sale (POS) system provider, we know a thing or two about building a high-growth business.
In this article, we’ll discuss the seven mission-critical steps all retail business owners follow to build and scale their retail shops.
How to Open a Retail Store in 7 Easy Steps
Before we begin, we should let you in on a little secret.
The most successful business owners share one thing in common.
They invest in the right tools and systems, one of which is a POS system.
POS Nation offers a powerful, all-in-one POS system that delivers on all the features and capabilities that you need to grow and manage your business. The best part is that our POS system is built specifically for your unique industry. In fact, our software comes equipped with all of the features you need to be successful right from the start!
But you need more than the right POS system to successfully open a retail store. Let’s explore the seven steps you need to take when opening a retail store.
1. Choose a Name for Your Business
First, choose a name for your business. It’s a relatively easy step, but one that will affect your business now and years in the future.
How do you choose a name for your business?
We recommend that you run a quick search on the internet. Has anyone else claimed your business name? Next, conduct a trademark search. This will help you determine whether or not you can get a trademark or service mark for your business name. As a best practice, try to get feedback from friends or trusted colleagues. What does your target audience think?
Remember, you’ll have to live with the business name for a long time, so make sure that you’re happy with it!
2. Create a Business Plan
Once your business has a name, your next step is to make a game plan. What type of store do you want to open? For your store to succeed in the market, you’ll need to find the niche your store can satisfy in a unique and meaningful way. Explore your passions and interests and remember that selling something you love will make it easier and more enjoyable to run your retail store.
Your business plan should also include information on the following subjects:
- Target customers
- Pricing plans
- Partners and internal team members
- Local competitors
Understanding these elements will help you create a plan for competing in the current market. Does your team have more expertise than the competitors? Perhaps you plan to win when it comes to price or customer service instead.
Your business plan should also include detailed information like the vendors needed to supply your inventory, how much cash you need upfront, and more.
Determining what you plan to sell, who you plan to sell it to, who you’re competing against, and how you plan to beat them is the foundation for operating a successful retail store.
3. Cover the Legal Basics
Next, complete local, state, and federal paperwork. Every business needs to comply with various business licenses or permits.
Here is a checklist of required documents/procedures:
- Apply for an Employee Identification Number (EIN).
- Select your business structure and file appropriate tax documents.
- File for a business operation license with your state, county, or city.
- Apply for a seller’s license if needed. Depending on your inventory, you may need specific permits or licenses, especially if you plan to sell tobacco or alcohol products.
It’s important to note that each state has additional requirements for operating a business. In this scenario, refer to your state's website.
Related Reading: Small Business Tax Preparation Checklist
4. Find the Right Location
We’ve all heard the mantra that the most important thing is “location, location, location!” It’s a hackneyed saying, but it’s so commonly known because, to an extent, it’s true.
Don’t fall into the trap of purchasing the cheapest storefront you can find. Instead, focus on understanding your target customer and setting up shop in a location that will be convenient for those individuals.
Where do your target customers spend their time? If the majority of your dream customers live downtown and don’t own an automobile, you’ll be hard-pressed to find success if you settle on a storefront five miles from the nearest public transportation station. On the other hand, if your target customers are busy professionals commuting by car, you might want to select a location on a main road with convenient parking that is easily accessible to drivers.
You will also want to consider store size and storage space. Consider the size of the inventory you plan to keep on hand in your store. If you’re operating a convenience store with a wide variety of inexpensive items for sale, you will have different storage and floor space needs from a high-end boutique looking to sell a few pricey, luxury items.
You may also want to explore building an e-commerce store in addition to your brick-and-mortar location. The modern shopper appreciates features like “buy online pickup in store” (BOPIS) and online shopping and delivery. If these are options you’re able to offer for your business, you may want to consider them to attract as many customers as possible.
5. Create a Personalized Experience for Shoppers
Creating a personalized shopping experience should be one of your top priorities when opening a new retail store. The best way to create a personalized shopping experience is to learn from customers’ habits.
What items do they buy repeatedly? An advanced POS system should make it easy for you to track customers’ purchases and preferences. Use this information to create personalized shopping experiences.
For example, if a customer buys a certain brand of clothing, you might consider offering a discount or special offer for every fifth purchase. It’s a great way to show customers that you value their business!
6. Explore Marketing Opportunities
Personalization isn’t the only marketing opportunity that you should consider during the early stages of your business’ growth. There are plenty of other high-value marketing tactics that you should deploy to drive sales.
And the best part is that most of these marketing tactics are relatively easy to activate and manage! Here are a few easy marketing tactics to try:
- Email marketing campaigns for new products
- Sales promotions on seasonal items
- Social media advertising
- Print marketing and in-store signage
Related reading: 5 Top Digital Marketing Solutions for Small Businesses
7. Partner With a Point of Sale System Vendor
Finally, be sure to invest in an industry-specific POS system. Investing in a modern, advanced POS system for your retail store will offer you benefits like faster transactions, better reports, more efficient inventory, and easier employee management.
Unfortunately, not all POS systems are created equal. Some vendors even overcharge for features that you’ll never even use. Over time, these unnecessary features could cost you hundreds or even thousands of dollars!
Before choosing a POS system, you’ll want to establish the features you need for your store. Your must-have features will vary depending on your business, however, most retailers benefit from features like:
- Streamlined Inventory Management
- Customizable Hotkeys
- Employment Management
- Customer Loyalty
- Robust Sales Reporting
You will also want to ensure that you partner with a company that has a solid reputation and a track record of helping businesses like yours succeed in the marketplace. A great POS vendor will handle your hardware, software, support, and training needs.
Look for a vendor who offers an all-in-one package if possible, as it will make for an easier implementation and prevent you from getting nickeled and dimed for add-ons to get the features you need for your business.
POS Nation’s solution comes with every feature included out of the box! Our system is free from hidden fees and long-term contracts, making it an attractive and affordable solution for first-time business owners nationwide.
The Key to Successfully Opening Your Retail Store
Unfortunately, success in the retail space is never guaranteed. It takes serious work and a strong commitment to your financial goals. Even then, success isn’t necessarily guaranteed!
Of course, you can increase your chances of success by following the steps listed above. Additionally, we recommend investing in a modern retail POS system like POS Nation’s.
Gotta Have It offers a full range of sports memorabilia. Peter uses POS Nation’s powerful retail POS system to manage his business from home and on the road. Is POS Nation the right retail POS system provider for your business?
To find out, download our free guide: The Retail POS System Buyers’ Guide.
Don’t overspend on a POS system that doesn’t deliver the features and capabilities that you need to succeed!