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Retailing is a business which is gaining more and more popular for those that wanted to start their own business and gain success on their own ways. One of the reasons why retail businesses are getting more popular is because among of the many lines or types or kinds of businesses today, retail is among of the easiest to maintain.
Though this is somewhat true, retail is still a business, and businesses are needed to be planned thoroughly and systematically.
Though retail is a business in which any could start (if they have the capital for it), there are still some that fails in this line of business. 70 to 80% of retail business startups fail in their first year. This is because of lack of planning and lack of business experience.
Although retailing is far easier to handle, planning is still a very important element in this business. So here are some tips in planning your retail business for success.
The Type of Business
The first thing that you should note in starting a retail business is the Type of Business it is. Firstly before you think about the designs of your store and your merchandize you’ll be stocking, you should carefully plan about your business’s legal documents such as the type of business it would be.
If you want to be the sole owner of your business, then your best choice would be Sole Proprietorship. A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others.
The owner of the business has total and unlimited personal liability of the debts incurred by the business.
If you want to run your business with your friend or one of your family members, then a business partnership is best for you. A partnership is a form of business in which two or more people operate for the common goal of making profit.
Each partner has total and unlimited personal liability of the debts incurred by the partnership. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships.
A General Partnership or simply a partnership, refers to an association of persons or an unincorporated company with the following major features: Created by agreement, proof of existence and estoppel, Formed by two or more persons, the owners are all personally liable for any legal actions and debts the company may face.
A Limited Partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners, there are one or more limited partners Limited partnerships are distinct from limited liability partnerships, in which all partners have limited liability.
A limited liability partnership has elements of partnerships and corporations. In an LLP, all partners have a form of limited liability for each individual’s protection within the partnership, similar to that of the shareholders of a corporation.
For starters in a retail clothing business, visit any online wholesale clothing site for easier access on all the stock you need.
The Name of Your Retail Business
The part that people enjoy the most in the planning stage is naming the business itself. Thinking about The Name of Your Retail Business is a lot of fun especially if you think about silly names that would hold your business. But do take this seriously because many have failed in their retail businesses mainly because of the name of their store. Here are some tips in creating a name for your business:
- Make it easy to understand. The name of your business is the first thing that customers would get an idea of your business, may it be for maternity dresses or street and urban wear. Don’t make it sound negative.
- Make sure that the first name you’ve chosen would be the last name you’ll hold. Changing the name of your business in the middle could cause you to loose some of your customers that grew accustomed with your original name.
- Be creative in thinking about the name of your retail business. Make the name of your business catchy, yet understandable for all that reads it.
Now that you’ve thought about the name of your retail business, ask these questions to yourself:
- Is it easily pronounceable and understandable?
- Is it relevant with what I sell?
- Does it convey a clear message to them?
- Does it have a positive or passive sound to it?
Also, if you would like it, you could always ask a friend or a family member about the name you’ve chosen. Get their personal thought about your chosen name, may it be positive or negative. This way, you’ll know what others think about your title, especially those that will come to buy at your shop.
One of the most time consuming the most difficult part of planning is choosing what Product you’re going to sell. The first thing that you’ll have think about the product you’re going to sell is its marketability.
Before considering the product you’re going to sell, determine what market you want to sell to. Once you know what kind of customer you want, then you’ll be able to determine their needs. Your product selection doesn’t have to appeal to all of the population but it should be something you can convince a large percentage of shoppers they need.
Research is also important. Research on what’s new and what’s popular in the industry you’ve chosen. For example you’ve chosen a retail clothing business; the best way to know what’s new in the world of fashion is through fashion magazines and on fashion shows. You could also observe what people are wearing today, or ask them the things that are in-season when it comes to clothes.
For clothing needs, check out what an online wholesale clothing site can offer you.
Your Store’s Location
In choosing Your Store’s Location, make sure that you do some research on the demographics of that place. Check out the population around your location, do this by visiting a Census Bureau or chamber of commerce in that area. Check out the density of your targeted market on that location. Lastly, check out if your location is easily accessible by customers and visible to all that pass by.
Now don’t confuse the traffic of people in that location to the number of customers you’ll be having. Not all that pass by your business are customers, but the number of foot-traffic of your location can greatly determine the outcome of your business. Make a research on how many people walk or drive past the location, if the area is being served by public transportation, if customers and delivery trucks easily get in and out of the parking lot, and if there’s adequate parking.
Also, check out what competition the location may offer. Determine if the types of businesses nearby are compatible with your store. For example, a high-end fashion boutique may not be successful next door to a discount variety store so place it next to a nail or hair salon and it may do much more business.
But other than that, the cost is what you should look at next to the traffic of people in that area. The location you can afford now and what you can afford in the future should vary. It is difficult to create sales projects on a new business, but one way to get help in determining how much rent you can pay is to find out what sales similar retail businesses are making and how much rent they’re paying.
Buying Your Wholesale Merchandize
There are many types of suppliers that can offer you the stock you needed for your retail business. Some can be found from trade shows or trade magazines, and some can be easily found on the internet. These include:
- Manufacturers. Ordering your stock from its manufacturer can provide you with the cost advantage you’ll need. Manufacturers sell their products at lower cost unlike ordering your stock from wholesalers or distributors. But the only thing about manufacturers is that they offer a limit on their stocks. Manufacturers may sell their products at large quantities or at a high minimum order. Also, not all manufacturers sell their products directly to retailers. Some manufacturers sell their products through a middleman which are distributors or wholesalers.
- Distributors. A distributor generally sells a large variety of a certain classification of products. As businesses itself, their price are a bit higher than that of manufacturers. The good thing about distributors is that they may provide lower quantities with little or no minimum order. Some even offer free freight on orders over a certain amount.
- Wholesalers. In searching for products at wholesale prices, you may find wholesalers that don’t sell just one type of merchandise but many, many kinds of products. Some will sell closeouts, truckloads and pallets of merchandise and even damaged goods. Before buying wholesale merchandise from this type of supplier, be sure you completely understand the condition, price and terms of the sale.
If you want some information on how to get your stock for your clothing retail business, then visit any wholesale clothing site or visit Seven Wholesale at www.sevenwholesale.com.
Don’t rely entirely on your location to get you your customer, think of ways to attract people to visit your store aside from your visibility and accessibility. Before you open a retail store, start spreading the word. Create a retail marketing plan, brainstorm sales promotion ideas, begin branding and advertising your retail store. There are a lot of books that can teach you on how to market your shop.
But one of the basics is setting up advertisements on streets, or pay-up on radio advertisements. Or if you’re low on budget, you could always ask your friends or relatives to give our flyers or brochures on people passing through your location.
ABOUT THE AUTHOR: Jefferson John Babasa