Ask any small business owner and they’ll agree: the rewards of small business ownership are well worth the hard work.
By opening a retail store, you can become a cornerstone of your community, providing them with high-quality products and even better customer service. Beyond these feel-good benefits, you can also turn a significant profit.
But your retail store’s grand opening might seem impossibly far away. With so much to learn and so much to do, getting started might seem daunting.
That’s why we’ve created this quick but comprehensive guide to share how to open a retail store. We’ll walk you through every step of your small business journey — from crafting your business plan to making your first sale.
Before you make any other decisions, you need to carve out an identity for your retail store and decide what you’ll sell, who you’ll sell to, and what you’ll call your store.
Let’s take a closer look at each of these decisions and explore how to create a retail brand that appeals to customers and stands out from competitors.
The most important choice you’ll make as you learn how to open a retail store is what to sell.
This decision isn’t just about what will be profitable; you should also keep your unique interests and expertise in mind.
If you keep up with all the latest fashion trends, you might have luck opening a boutique. If you’re a cigar connoisseur, perhaps you should launch a tobacco store. If you’re a proud resident of a tourist-friendly destination, consider opening a gift shop.
Specializing in products that you’re passionate about will help you connect with customers and build their trust in your brand.
Now that you know what you’re selling, the next step is identifying and learning about your ideal customer. Who will your products appeal to? What are their likes and dislikes? What are their demographics?
Understanding this ideal customer will help you make informed decisions and ensure that your products, customer service, and marketing strategies appeal to the right people.
You know what you’re selling and who your ideal customer is, and now it’s time to choose a name for your business that matches.
Naming your retail store is a fun but crucial decision. This name will be displayed in large letters on your sign, printed on all of your receipts, and passed around by word-of-mouth from happy customers.
Here are a few important steps to take before you commit to a store name:
Renaming your business can be a costly and inconvenient endeavor, so choose wisely the first time.
You’re one step closer to turning your retail store dreams into a reality! Now it’s time to make a concrete game plan for opening your doors.
Here are three essential elements of a comprehensive retail store business plan.
Opening a retail store takes more than hard work and a great idea; it also requires a significant financial investment.
Whether you’ve been saving up for years or you plan to apply for loans, your business plan should cover exactly how you plan to secure funding for your small business.
Your business plan should also include a thorough financial plan, outlining how much you plan to spend and how much revenue you hope to bring in through sales.
Here are some key expenses to include in your prospective budget:
Don’t forget to include a buffer for any unexpected expenses.
Your next step in how to open a retail store is to make sure that your small business is legally compliant.
You likely need to apply for federal, state, and local business licenses and permits, so make sure to start the process as early as possible. Here’s what to expect during this process:
The Small Business Administration and your state government’s website are great sources of information about the legal requirements of owning a retail store.
With the groundwork laid, it’s time to stock your store’s shelves with products. Here are three ways to get started on the right foot when it comes to inventory management.
Product vendors are a critical piece of the retail store puzzle. They supply your store with high-quality products, provide timely deliveries to prevent stockouts, and let you expand your offerings when new items hit the market.
That’s why it’s important to establish solid connections with vendors you can trust. Evaluate your options, negotiate your contract, and ensure constant communication throughout your business relationship.
Having the best vendors at your side only matters if you have an effective inventory management strategy.
The easiest way to track your stock levels and prevent stockouts is to invest in a POS system with built-in inventory management features. This powerful tool monitors your stock levels in real time, detects shrinkage, and generates purchase orders when you’re running low on a certain product.
With the right POS system, you’ll be able to provide the largest selection to your customers, keep up with seasonal changes in your sales, and optimize your offerings to meet your shoppers’ wants and needs.
You’ve built a brand, secured a business license, and stocked your shelves — now all you need to do is attract shoppers.
Marketing is a critical part of how to open a retail store, letting you bring new customers through your door and keep them coming back. Here are three strategies to grow your customer base and keep the sales flowing.
There’s nothing customers love more than the opportunity to save money — which is why enticing promotions are a must-have for effective retail marketing.
Offer a mixture of buy one, get one (BOGO) deals, mix and match sales, flash sales, and storewide coupons to encourage customers to spend more during each visit to your store.
Did you know that it’s four to five times more expensive to attract a new customer than to retain an existing one?
To keep your sales high and marketing costs low, we recommend launching a loyalty program. Your loyalty program should reward shoppers for choosing your business by letting them earn points and unlock exclusive perks. The more they spend, the more they’ll save — which means it’s a win-win.
If you’re hoping to get a head start on attracting customers to your store, you can also leverage digital marketing techniques. Here are a few approaches to consider:
These strategies can expand your reach and help you spread the word about your retail store.
If you’re still following along, you’ve probably noticed a common thread in all our tips: a powerful POS solution is the foundation of retail store success.
That’s why our final and most important tip is to choose a POS system designed to help your store survive and thrive. Here are just a few ways to use your store’s POS system:
The right POS system has the power to keep your store running smoothly and profitably, giving you more time to spend connecting with customers and growing your business.
Congratulations! Now you know how to open a retail store, and you’re ready to take your first steps toward small business success.
Looking for support as you start your journey? See how this specialty retailer relied on POS Nation to simplify their operations, save time, and provide excellent customer service.
If you’re ready to see how our feature-rich software and industry-leading support team can give your retail store the best chance of success, schedule your live demo today!