What are the critical first steps in setting up a retail business?
I want to set up a chain of small retail stores selling food, both fresh and packaged, useful day to day use items, gifts, ice cream, etc. in hotels and stand alone locations. What are the critical first steps I need to take to get this idea off the ground?
I recommend this book on exactly that subject http://www.amazon.co.uk/You-Dont-Many-Drugs-Cauliflower/dp/1781488053
You don't get many drugs for a cauliflower" is a publication which allows any type of retailer an opportunity to maximise the performance of their business. It offers an insight into 35 years of the author's experience in the retail sector and the lessons learned. It contains information on how to be successful and also examples and exercises of how to improve the performance of any retail business, irrespective of size or type. It is a workbook which can be used on a regular basis to keep the business effective, efficient and profitable.
Consult a lawyer who specializes in retail food. Take a food safety class. The legal requirements will help you understand how you must lay out a store (staging areas, washing stations, sufficient refrigeration, etc.).
The legal issues will also help you assess the costs, initial and on-going.
To make a chain, you need to get one running first. Expect long hours. It will not be easy.
See what marketing statement and strategies work for others
Than budget to market your success and failure
Who is your competition, and are you in a position to compete successfully with them?
What need would your stores fill that is not being addressed by existing retailers in your market?
In the areas where you address the same need as competitors, why and how would your stores do it better?
A business plan is a good idea but first you need to do a lot of research. What is the problem you will be solving for your demographic? What I mean by this is, is there a need in your community that your business will be addressing?
After you determine that then you need to research the competition in your demographic area.
These are all questions a lender will want to see addressed in your business plan if you will need to acquire outside funding.
I believe these are the basic first steps you need to take in getting your idea off the ground.
Please feel free to contact me should you want to discuss in more detail.
One of the keys to being successful in business is to perform your research. You may want to take the following into consideration in order to complete a business plan successfully as well:
Research product cost, selling cost, competitors, demographics, legal requirements, environmental concerns, management, etc.
Research Business Model - Corporation, LLC, Sole Proprietor Read: http://www.amazon.com/gp/product/B00VJ6ABAI?*Version*=1&*entries*=0
Decide if you may need Business Credit in the future. (Remember your business model may affect future credit opportunities.)
Determine what you want to achieve as an expected outcome with your business.
Develop a financial model based on your products and services and what you hope to achieve annually for your financial projects. (e.g., if you need $1m in revenue / 12 months you need to sell how many of each of your products to receive ______ monthly. A Financial Model will help you to draw assumptions/projections)
Consider branding and marketing strategies.
How does what you have to offer to potential customers add value? What is unique and different about it? Who is your targeted audience?
Planning is the factor that will help you to remain focused and aligned to your vision. You will also need it if you plan on getting financing.
Let me know if you have further questions.http://www.vcita.com/v/keilifecoaching/online_scheduling?staff_id=6628c6e0047b7cb8
I have a free e-guide you can download and go through in case you miss any key points: http://lulu.com/shop/c-k-yap/1-million-business-ideas/ebook/product-21920607.html
From experience, because Malaysia has a lot of high and low end retail, you have to achieve high turnover at low prices. There's no other way to survive in today's economy except volume sales and budget prices. Sourcing your product for maximum impact isn't hard with so much choice. I recently bought NUDE mints from Japan - that's a killer product.
Congratulations on taking the plunge to start your own business. But before you do so, I have a number of suggestions and these are from my own and others experiences as a retail entrepreneur and business mentor.
The first critical steps in setting up any business should be the ideation test. I will take excerpts from my previous answer to a similar question here - http://www.mosaichub.com/answers/question/how-can-i-find-the-exact-list-of-people-and-expert#43823
You may want to answer these questions to begin with;
1. Is this a business that is going to fill a void, solve an existing or future problem?
2. What value will this business bring to the customers?
3. How/Where do you intend to start, continue to reach and serve your customers?
4. Are you ready to commit blood, sweat and tears to make this work?
If you decide to go ahead, by all means, get all the help you can to develop a business plan, but before you commit, you may also want to check out the competition to see what you can learn from them. It may also pay if you can find a good mentor, someone in your trade who understands that particular industry and what it takes to be successful.
Your first exercise should be Test Marketing - Creating a Minimum Viable Product if you are going to be producing the products yourself.
Producing samples of your work - This is what you're going to use to test the market and see if there's a need for what you're going to make, produce, stock or sell. If people can see, touch, try and ask questions about your products, you'll soon understand if it is a workable business idea or not. This will also enable you to understand your customers and their demographics.
During this process, you will also become familiar with who your customers are, where they are, why they want or don't want it and what they willing to pay for it. Who your suppliers are, partnerships, staffing requirements, location etc.
Ensure to minimise risk at all levels - and avoid the burn and crash scenario.
This should help you get started and the lessons you learn from this exercise will inform on a lot of the decisions you make from here on.
I hope this helps. Feel free to connect if I can of further help.
Think margin first. What will you sell and how will you ensure it has a sufficient margin to make a contribution to overheads and your salary. There are hundreds of other retailers in your space and a cold start up just can't compete unless you get a location that allows you to charge a premium price and hence you make a sufficient margin.
What is your source for goods? Will you be able to buy at less cost than your competitors? Will you have any unique products? (they command better prices). Is there anything to suggest you can achieve better sales prices than your competitors?
I agree with the other posts, get all this into a business plan, and let the numbers destroy your optimism bias. Once you are realistic you can begin to tackle the obstacles you must overcome.
Also think about seasonality, is there a steady flow of business all year round or is it just 5 months of 12 hour days and then close the concession down until next season?
Last of all start with one site and get it working and profitable before you expand.
!. Create a budget. 2. Raise the cash you need to survive for two years including your own living expenses. 3. Location, location, location 4. Start with one location, build traction, reputation, and learn what sells and does not. SWOT--figure it out, write a simple business plan then rewrite it several times. I think 7-11 is already in your business.
Richard Stern-Suggest you prepare a Business Plan and two Budgets. A Start up Budget and an Operations Budget.
A concept shop? Is it brand new or a franchise one? If it is brand new, than the first step to test your concept. A quick rough plan to draft out your business model and operating flow with its environment. You can simulate for a start as you not yet build the shop.
Example of concept testing, check whether you have these criteria
You can further make some investment to setup a pop up shop.
This helps you to gain more confident about your concept before you decided to really put in huge money to invest!
Once you believe you are ready ...look for the BEST location for the first shop - a) location has direct influence to the success; b) to become the model for the subsequent. shops.
Good luck and all the best
No matter what business you are contemplating you need to develop a business plan so that you understand the magnitude of what you are thinking about doing. Along with that and the most important element of your plan is a break-even analysis for the first year of operations so that you can clearly see how much you have to sell to cover the costs of setting up the business to do business, and the expenses involved in managing the business for the first year. If you do not feel confident in being able to achieve the level of sales needed to cover the start-up and operating cost for the first year, then I would question your ability to generate a profit. Plus, where are you getting the money to get ready to do business and then cover the operating expenses for at least the first 6 months?
All good answers - business plan should be a key part of your initial planning. You need to map this out - especially because you are using an "s" on the end of everything. Multiple stores means multiple issues, supporting Gary's comment about separate corporations and structure. Looking at your profile I assume this is being planned for Nigeria? If that's the case then your next move would be to find local respected professionals in legal, accounting and insurance that understand the local workings and complexities of a business there.
Akin: At first, you should address the legal & financial issues required of any new business. Establish your "corporate form" (corporation or LLC) and IRS application for an S corp if corporation; licenses required for your business, business name (Brand), banking relationship, credit card system, etc. I suggest that each location be housed in a separate corporation.
Have you proven the concept? If not, rather than thinking in terms of your chain, search for your first optimum location, prepare a simple business plan for that location and open to prove your concept. You can then add locations and take advantage of the experience gained from store 1.
The first step is determining what licenses you need in the jurisdiction you aregoing to operate. If you are preparing food in the store, then you will need a license to do that. If you are serving non-prepackaged ice cream iike a Ben & Jerry's retail ice cream store you need a license in most states in the USA. If you are going to sell wine, beer or spirits you will need a license for that as well.
Next, you need to determine the number of items you will sell and the size of the store. Inventory control and turnover are critcal. You need to research your product mix and the target market for your store. Grocery chains while tthe hey carry certain fundamental items in all locations, there is a fair amount of change and difference between certain areas and locations.
Next you need to develop your demographic and target market for the store. Then you need to design the store and your brand accordingly.
Build a quick business plan to check if your business can overcome the initial emotional issues. The plan will let you think besides the owners' emotion. I recomend you to ask for someone to help you build this plan and make it independently.
A business plan is useful, but I would suggest doing an analysis of the geographic area to determine where best to place these shops. You may also want to do a market analysis to determine what shops will actually succeed. Finally, you'll need to consider how you'll get finances to purchase locations and get inventory in place.
Hi Akin, Your first step is to complete a business plan. If you are not ready for a business plan, you might want to start with the business model canvas strategy. Here are links to my blog which might help you get started. http://xlconsultinggroup.com/starting-a-new-company-we-explain-how-the-business-model-canvas-strategy-can-help-you/