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So you have decided to quit your day job and move into the glamorous line of retail. But just before you make your final decision to embark on this new adventure, perhaps allow us to give you a sneak preview of the 5 things we think you should consider before setting up your retail business.
Knowing you future business
Your decision is set; this is the future you envision for yourself, being a retail business owner. But before starting up, it is important to understand all aspects of your future endeavor namely; what is your intended product or service going to be? Are you passionate enough about the business you are going to start committing to? The long hours of the retail business can really be a burden if you do not have the passion for what you are doing to see it through.
However, one of the most important aspects to look into is what is the future business model of your retail business? Is it a viable one? In our time as retail designers we have seen too many retail businesses fail because of a lack of strong business fundamentals present.
Who are your customers
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Far too often, we hear retail owners tell us that everyone is their client or customer. Unfortunately there is no truth too this. If for example, you were to run a ladies fashion boutique would men make a good clientele? It is true that, certainly a man could shop for ladies clothing for their wives, etc but would men in general make a good customer base to be spending your marketing efforts on?
So here it is necessary to accurately define who your target customer is. This sets the stage for follow up questions which would help you to further define your customer. Questions such as, would they pay for your product or service and what need would your new retail business meet for them. It certainly would not hurt to understand some of your potential target customers habits such as how often would they require your product or service. Ultimately, the more you know about your future customer the better your retail business will fare at the start up stage.
Location, location, location
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To say that location does not matter would be a critical mistake for your future retail endeavor. Why? Well for one, where your retail store is located would very much determine who your customers are. Second, opening in the wrong location would certainly affect things such as number of customer walk-ins as well as visibility for your retail outlet. This is also where understanding of your target customer can easily help you to identify where your business has the most opportunity surviving and growing.
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This goes back to our previous post where we spoke about customer experience being one of the most important retail trends to look into in 2015. We still stand by this and we cannot stress the importance of it. With the rise of online shopping and mobile commerce, brick and mortar retail businesses have to do more to pull in customers to visit their stores. If it is not about price, you have to understand what is it that would pull your customer into visiting your retail outlet. We believe it is all about connecting with your customer.
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The most important aspect to consider here is where is your source of funding is coming from for this retail project. Would it be from your savings? If it is have you budgeted enough for the following items:
1) Working capital for the business for at least 6 month – 1 year (i.e. to cover month to month operations costs)
2) Renovation costs
3) Rental enough to cover at least 6 months of operations
4) Equipment costs
5) Marketing costs
This list is not exhaustive but we think you get the idea. Too many times we have seen good potential retail businesses fail because this important step was not taken into account.
At the end of it all, not every retail business will boom as soon as it opens and sometimes it will take some time to gain momentum but we believe if you take look into these 5 areas in extreme detail and clarity, you should be alright.
Our final advice, get someone to work with to evaluate the viability of your plan, preferably someone who does not have a vested interest and with a clear open mind who would be willing to tell you the truth. With that, we wish you all the best in your future retail endeavor.
At Visata Creative, we work together with our clients to Design Profitable Spaces. We work strategically as partners to our clients to ensure that they are equipped with the with the necessary insights and guidance for their businesses based on our years of experience in the retail industry through our interior design, graphic design & strategic marketing services.
To us, bigger space is not always better, what matters most in retail is the profitability of the space. We believe in winning the award that really matters in our industry – Helping our clients achieve the highest profitability possible within their retail business.
View our case studies to see how we have helped our clients achieve their goals and helped improve their businesses.
If you have any inquiries, email us at firstname.lastname@example.org and we will get in touch with you very soon!