Your Guide to Opening a Retail Business
Between 2010 and 2020, the number of new business applications in the US increased by 74 percent. In total, 4.35 million applications were submitted in 2020.
It can be easy to see why so many people want to own a business in America. The US is one of the world’s highest-ranking nations for starting a business.
If you've been thinking of opening a retail business in the US but don't know where to start, you've come to the right place. Here's a step-by-step guide on how to start a retail business.
Determine Your Niche
One of the first things you might want to do when you open a small business is to find a niche market. Many people grapple with this step, but you don't have to.
Start by exploring your interests and passions. Knowing what you love to do can help make the business so much more enjoyable.
Be sure to brainstorm any potential conflicts. Once you figure out possible issues and obstacles, it might be easy to decide if the industry is still a good fit for you.
Consider the niche's profitability as well. A sure way to know whether a niche is profitable is if there's substantial competition. An industry without competitors can indicate that there's little to no demand for the product or service you're thinking of offering.
Write Your Business Plan
Most successful retail businesses start with a business plan. It's not enough that you have a great idea for a business. You need a business plan to help make that idea a reality.
When you write a business plan, you're providing a physical roadmap that details steps you're going to take to get your retail store up and running. A solid business plan includes details on:
- Your products or service
- Type of business (i.e. online store or a brick-and-mortar store)
- Your target market
- Your marketing approaches
- How you intend to set yourself apart
The business plan should also detail your processes, including who your vendors are going to be, the number of employees you may need, your startup costs, your expected breakeven point, and so on.
This is also the time to create your business budget. Special attention should especially be paid to startup costs. These include costs associated with merchandise, equipment, payroll, small business insurance, software, rent, utilities, potential renovations, and so on.
Now that you have a business plan in hand, it's time to make things official. You'll need a suitable business name for this step. Choose a name that best reflects your venture's purpose and one that's available for use.
Consider buying a domain name for your business and building a business website to serve as the foundation of your online marketing strategy. A business website could be critical if you intend to run an online store. You may want to start social media accounts for your business to help boost your online presence.
Determine the most suitable legal structure for your business. This is a necessary step when registering an enterprise. You might want to hire an experienced business attorney or accountant to help you with this step.
After you've established the type of business entity you want to open, register your company through the Secretary of State website. Then apply for your employer identification number (EIN).
Obtain the Required Business Licenses, Permits, and Insurance
Depending on the state you reside in, you may need a general business license or have to obtain permits and licenses at any industry level. Local licenses and permits may also be necessary. Visit your county or city clerk's website to find out what you need.
Don't forget about small business insurance. As a retailer, you should consider:
- Business Owners Policy
- Workers’ Compensation
Make sure you've budgeted for the cost of small business insurance to help ensure this step goes smoothly.
Determine Your Business Location
If you plan to run a physical store, find the best possible location for it. You may want to choose a heavily trafficked area as it could make marketing almost effortless. A location that's tough to find could adversely impact your bottom line.
You also should consider establishing an online presence. That's where a top-quality website comes in. SEO could make it easy for potential customers to find your store online.
Find Vendors and Suppliers
The next crucial step in opening a retail store is to establish relationships with reliable vendors and suppliers. The right suppliers could ensure that you have quality merchandise at a price you're looking for.
Research a vendor's reputation, customer service, product quality, and prices before you start working with them. If possible, have several vendors and suppliers as a backup plan in case your vendor of choice is unavailable.
Your employees are one of your biggest assets in a business. That's why you should take the time to hire the right team to help you guide your retail business to success. Generally, you want a team that'll stick with you for as long as possible.
During the interview, consider both experience and attitude. A good employee doesn't just possess the skills for getting tasks done but is also innately kind, friendly, and trustworthy.
Get Your Finances in Order
Determine the amount of money you need to start your business. You will want to secure enough funding for your business unless you are funding your startup out of pocket.
Be sure to open a business checking account to separate your business funds from personal funds. You might want to apply for a business credit card as well to help with payment of smaller, daily business expenses.
It's also a good idea to hire an accountant and invest in reliable small business accounting software. It could help with organizing and streamlining your business finances.
Market Your Business
Now that things are set up, it's time to get the word out about your retail business. Think through a creative marketing strategy to generate the buzz about your offerings.
As a small business, chances are you're working on a tight budget, so you want the most affordable marketing tactics you can. Consider investing in SEO, social media, and email marketing, and other effective tactics your business can afford.
Opening a Retail Business Shouldn't Be a Pain
Many people with viable business ideas never act on them, they might believe running a business is the preserve of seasoned entrepreneurs. The truth, however, is that you can start a retail business, even if you're a novice. It takes careful planning and following the right steps to get started.
Are you interested in buying business insurance for your next startup? Contact us today to learn how we can help.