May 17, 2013

Guidelines For Owning And Operating A Small Retail Business

If you are thinking about owning and operating a small retail business you may already be aware of the many hurdles you will have to cross in order to get your business up and running.

In order to help you through some of the beginning stages we have put together a few basic guidelines that will not only help you to own and operate a small retail business, but will also help you to become successful at it.

#1 – Deciding On A Business Name

First and foremost, the success of your business will largely depend on the strength of your business name. This is why it is so important to choose a name that is not only professional sounding, but one that will also help your potential customers to understand what type of business you are offering.

When thinking up business names keep the following in mind:

  • Does the name sound good when said out loud?
  • Is the name easy to remember?
  • Do the initials of your business name spell out an unfortunate acronym?
  • Will customers be able to tell exactly what it is you are selling just by hearing your business name?
  • #2 – Choosing Your Products

    Hopefully you already have an idea of what type of retail business you want to get into before choosing the name, but now you will need to determine exactly which products you will carry. The best way to determine what brands, models and styles of products to choose from is by looking to see what is currently popular in your industry.

    Some areas to help you figure this out is through the use of:

  • Industry publications
  • Tradeshows
  • What your competition is selling
  • And any form of advertising from businesses that are similar to yours
  • #3 – Setting Your Prices

    Once you've determined a selection of products that you will carry in your retail store you now need to set the prices. When setting your prices you not only need to be competitive in your pricing in order to offload stock and be successful, but you also need to price in such a way that there is a perceived value in the products you are offering.

    When setting your pricing, keep the following categories of products in mind:

  • Necessity items – these are everyday use products, so for the most part, if a consumer can get them cheaper somewhere else they will
  • Status items – a status item will always come with a higher price tag, and it is this higher cost that gives the perceived value. If you price too low potential customers may think there is something wrong with the item
  • Impulse items – these can be anything from the cheap products at the checkout to promotional products. They are not usually something the customer had intended to buy, but once they see the deal they may feel they can't leave your store without it.
  • #4 – Hiring Your Staff

    In the beginning stages of running your own business it is likely that you will be the one and only employee. As you get busier you will need to think about hiring staff. Before you post an ad or throw up a help wanted sign in the window you need to have a clear understanding of the job descriptions for each and every employee that will work in your business. And yes, this even includes a description for your role.

    Some considerations when hiring and interviewing potential employees are:

  • Try not to judge a book by its cover – the most clean-cut, well-put together applicant may not be the best employee.
  • Is the applicant comfortable speaking with you during the interview? Do they make eye contact? Remember, this person could be the employee responsible for interacting with your customers, so if they lack social skills they may not be the best for the position.
  • Always check references. It is unfortunate, but many people lie on their applications and resumes, so make sure you follow up with their previous employers before you make any decision.
  • By following these four basic guidelines you will be four steps closer to owning and operating a successful small retail business.

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