1. Carry Out a Market Research
The first step to opening a new retail store is to make sure there is actually a demand for the products you sell. To do this, you must carry out market research. The purpose of this research is to find out if there is indeed a demand for your products or services. Your store won’t make enough profit to stay open if there are not enough customers in your target audience or if there is no demand for your products.
First, you need to understand your target audience. You must define this target audience and determine its size. It must be enough to make your store successful. The bigger the target audience, the more potential customers you have! This doesn’t mean your target should be too broad, but small markets limit your growth potential. You also need to know the characteristics of the people you are targeting. What is their sociodemographic profile? Their median income? How would they get to your store if your project comes to fruition? These are all questions to ask yourself to better understand your target audience.
Market research also involves analyzing the competition in the various geographic areas of interest to you. This helps you know if you will be competitive in your industry and choose the best location to maximize your sales. There should not be too many competitors to give you a better chance of securing a place in the market. However, if there are no competitors, it may be due to non-existent demand or a sign that you will have difficulty penetrating the market and convincing people to buy from your store.
2. Consider All Your Possibilities
Before you get started, you need to consider all your options. Most merchants dream of opening their own store, even starting a retail chain. However, this is not always the best option. You need to ask yourself if you really need a new permanent physical store.
A pop-up store may be a more interesting option. These stores are temporary and usually do not require large, complicated and expensive facilities. They allow you to test the waters without making a permanent commitment and without spending too much money.
Opening a pop-up store in different cities also serves to encourage customers to visit your main store or your online store. This way you can find out if a physical store has the potential to be as successful as your online store.
It is important to inform yourself and consider all your options. You will then be better equipped to make the best decision for your business.
3. Develop a Business Plan
When you are sure there is a demand for the products you sell, the next step is to make a plan for opening your store. This is done by developing a comprehensive business plan, which outlines your goals, target audience and financial objectives. All of the following elements must be included:
- The products you will sell.
- Your mission, goals and values.
- Your target audience.
- Your financial projections.
- The prices of your products and services.
- A marketing plan.
- Costs to open the store.
- All expenses to operate the store.
- How you are going to finance yourself.
- How you will manage inventory.
- The number of employees and their tasks.
- Competitors in your industry and in the area where you plan to set up your store.
- The risks and how to mitigate them.
With such a plan, you have a better idea of which direction to take to succeed.
When you have a final plan, you need to raise funds for your project. Opening a new retail store requires a lot of money and resources, before you even start.
You can solicit investors or obtain a loan from a financial institution. You will need to present your detailed business plan to them and demonstrate a lot of confidence to obtain financing from them. They want to be sure they don’t lose their money, so your plan needs to be thoughtful. You need to know how much money you need and how you will use all that money.
There are other ways to finance the opening of your store, such as self-financing or crowdfunding. You may also be eligible for government subsidies. Do your research!
Be sure to explore multiple ways to acquire funds. You will then find the most beneficial source of financing for your business.
5. Find the Best Location
Time to find the perfect location! The location must be strategic. There shouldn’t be too many competitors, but there should still be a demand for what you sell in the area surrounding the future store. The store must be easy to find and accessible on foot, by cars and even by public transportation, if there is any in the region. There must also be parking around the building. Foot traffic around the store must be quite high.
Here are some other aspects to consider when choosing your location:
- The rent (is it fair in relation to the traffic around the store?).
- Size (is it enough for everything you want to put in your store?).
- The owner (are they trustworthy and open?).
- Security (is the neighborhood safe? Is the building well secured?).
- Local regulations.
A real estate agent specializing in the sale or rental of commercial buildings can help you find a space that suits your needs and budget. You can also do research online or reach out to local communities on social media. Whichever option you choose, you need to talk to the owners and visit several premises to find the perfect location.
6. Comply With Local Laws
This is often a part that we forget, but you have to make sure that you respect all the legal requirements that come with the opening of a new store. Make sure to obtain all necessary permits for operating a store and to comply with local health and safety laws.
The rules to follow depend on the sector of activity. Some industries (like the food industry) are heavily regulated, while other industries are barely regulated.
You must make sure to comply with all local and federal laws, for example, and not make errors in your tax returns. Consult a lawyer and an accountant to make sure everything is done correctly.
7. Choose Your Technologies
Another important element when opening a store is to determine what your technological infrastructure will be. This includes the point of sale system, the inventory management system, but also very simple elements such as wifi or screens. These are used to advertise, make displays more attractive and interactive or even help customers find the products they need.
Technology is very useful, especially point of sale softwares like Alice POS. It helps speed up processes and avoid errors, in addition to greatly improving store keeping.
8. Plan the Layout of Your Store and Place Your Facilities
When you take possession of your brand new space, you need to furnish it and set up great displays, posters, and other essentials to serve customers every day. Make the store layout attractive and practical. All products must be accessible easily and as instinctively as possible.
Displays and store layout greatly contribute to making the customer shopping experience extraordinary. The more thoughtful and beautiful the space is, the more it encourages customers to browse the products and make a purchase. You have to think about the decor, the light, the ambient noises and the position of the checkout.
If you already have a first store, the second must look like the first in every way. The goal is for customers to recognize a familiar environment in all your stores. This also helps build their loyalty.
9. Choose the Most Advantageous Suppliers
Make sure you establish a reliable supply chain for your new store. If you already have a store, physical or online, you already have suppliers. However, it may be a good idea to look for new, more favorable suppliers in the area where your new location is. This choice is important because it influences the quality of your products, customer satisfaction, as well as your prices and profitability.
Choose suppliers who can provide what you need within reasonable timeframes. If you are always out of stock, customers will no longer want to visit your store. It’s also essential to know the cost of your merchandise before the grand opening. You don’t want to have the unpleasant surprise of discovering hidden fees after your store enters the market. Get well informed about the different suppliers!
10. Put Together a Team of Employees
The next step is to hire competent employees. It is not necessary that your new employees all have extensive retail or sales experience. However, they must learn quickly, have initiative, be smiling and have patience and interpersonal skills.
Once you have hired your employees, you need to train them so that they are able to take care of the store even when you are away. Show them sales techniques, your procedures and how to use your systems.
Also make sure that your employees are able to offer quality service to customers. Customer service employees and salespeople are responsible for providing the best customer experience. They help make the customer experience very pleasant or very unpleasant. You must therefore choose the people who best match your values and the work atmosphere you want to maintain.
11. Take Care of Security
This aspect is essential! You must implement security measures to protect both customers and your goods. These security measures could be hiring security guards or installing surveillance cameras in your store. You can even buy a heart defibrillator for your store in case something happens.
Also make sure to take insurance to protect your store against theft, fires and other threats to your store.
12. Prepare Marketing Strategies
Ultimately, developing a marketing strategy is essential to success. The aim of this strategy is to increase awareness of your business and inform the world of the grand opening of your store. For example, you can organize a big event for the official opening of the store and invite as many people as possible, including journalists and current customers.
Use multiple relevant channels. Make some noise! For example, you can increase your online visibility with ads or by sharing posts on social networks. Emails and content on your website and social media are often effective in creating a buzz around your store. These discussions can attract customers. Also make sure to update your profile on Google and Facebook as soon as your store is ready. Your new address should be on the internet so people can find you easily.
Reach out to your current customers. Encourage your most loyal customers to spread the word to their acquaintances or to share your publications. You can even give them an incentive to do so. This way you acquire new customers at low cost.
For more tips on opening a second store, check out this article.
Now you know some of the essential factors to consider when opening a new retail store. By relying on this guide, you will be sure not to forget the most important elements. These factors represent the foundation of your success. By considering these aspects, and with rigor and ambition, you will be on the right path to becoming a very successful store manager.