Starting my business

Starting my business

16 Minutes

If your dream is to open a retail store, this article gives you the information you need to do it step by step. 

The key to success, if you want to open a retail store, is in the planning and organisation. Following a structured business model will help to maximise your chances to succeed in opening your retail business activity. Discover here which are the main steps to consider while thinking and starting your business.

Summary: 

  • Validate your store creation idea
  • Write a business plan to open a retail store
  • Secure the finance
  • Consider the budget
  • Organise your administration and legalities
  • Decide on the location
  • Prepare your stock and range
  • Create a marketing plan
  • FAQ

 

Validate your store creation idea

Come up with a unique idea

You may have the most fantastic idea in the world, but it will only work if there is a demand for your products in the area you plan to set up in. Just because you like something doesn’t mean there’s a need for it. Whether you want to sell food, gifts, toiletries, toys, or homeware… the list is endless, you have to find out if there is market demand for what you plan to sell. 

Start with aiming for a niche market that offers something other stores don’t. 

 

     Case study example

Susan has an autistic child and can´t find anywhere to buy toys to calm them. She talks to a number of parents at her child’s school and joins online forums to find out if people would buy her products. 

She decides to set up an online store to address this need, and within 6 months she’s making £500 profit a month as she saw a gap in the market. She’s not only selling in her local area, but online too.

Research

Market research is essential. The quickest and cheapest way is to ask friends and family if they would buy your product. But this will only give a limited idea of whether your idea will be successful. Other research ideas include:

  • going door to door in your local area
  • handing out questionnaires in shopping centres or at local events
  • gathering data via email if you already have a customer base from another business
  • paying for professional market research

Write a business plan to open a retail store

Why do you need a business plan?

All businesses should have a plan. Once you’re clear about what your product offering is going to be it´s time to write a detailed business plan. This will give you a structure to follow and may be necessary to present to potential investors.

H3 What to include in the business plan

The business plan should include:

  • Business goals  – what you aim to achieve
  • Target market – potential customers using your market research
  • Your USP (Unique Selling Point)what makes you different from the competition
  • Product category – broken into sub-categories e.g. Clothing > adults/children/men/women/accessories/footwear/seasonal
  • Location – whether you intend to set up a physical (and in which area) or online store
  • Supply – where you will source your products
  • Marketing – how you will attract customers (this doesn´t need to be detailed as a marketing plan will highlight the specifics)
  • Finance – how much capital you have, whether you need to ask for investment, projected profitability over 1-5 years, additional costs such as staff, overheads, rental, marketing
  • Staffwho will run the business, whether you need to employ full-time or part-time staff, the cost of an accountant, administrator marketing manager etc. You should consider whether you can outsource some of the staff costs (such as admin) to save the expense of contracted employees.

 

Secure the finance

Be aware of the cost

You probably have some idea of how much funding is available, but you must go into detail and ensure you have enough money to open a retail store. The initial outlay could be large if you have to rent or buy premises, fit out the store, and buy stock and materials such as cash registers and payment machines. This is all before you achieve any sales.

Working out the costs

List the costs on a spreadsheet and compare them to the money you have available. You should also allow a sum for backup funding for unexpected costs.

There are a number of ways for businesses to get funding. If the cost is more than you expected, you may need to secure finance from a third party. The cheapest way is to ask for a loan from friends or family, but if this is not possible you could visit your bank for a small business loan or use a credit card if the amount is not too high.

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Consider the budget

The budget is important

Once you have the finance you need it’s important to set a budget to manage your finances. This is an essential part of running a profitable retail store and must be continually managed. You need to have an idea of your estimated sales.

Sample profit and loss sheet

This is a very basic profit and loss sheet you could use and develop as your business grows.

                            RETAIL STORE PROJECTED PROFIT & LOSS YEAR 1                        
TARGET ACTUAL DIFFERENCE +/-%
Income
Profit
Stock 
Marketing 
Tax/accounting expenses
Furniture
Equipment
Other expenses

Of course, you want to see the last column as a positive number, which means your business is making a profit. 

Organise your administration and legalities 

Set up admin procedures

Whether you decide to create an online or a physical store you’ll need a number of efficient admin procedures in place right from the beginning. Not being able to find a price list, file or important document when you’re under pressure can be very frustrating. 

These are the basic documents you’ll need to run your retail store. As the business grows you can add to this list, e.g. seasonal marketing plans, staff data, stock records etc. 

  • inventory and pricing lists
  • supplier data
  • customer data (can be gathered once you set up)
  • quality control sheets
  • an efficient invoicing system

The secret to good administration is to automate a number of tasks. There are lots of software packages for businesses available to help you manage your admin, from finance tools to hand-held stock readers.

Arrange the legalities

When you open a retail store, particularly a bricks and mortar premises, you need to ensure that you comply with the relevant regulations. These include:

  • registering the business with HMRC (the tax office) to ensure you pay the correct VAT rate on everything you sell
  • employment law, depending on the number of employees you hire and their contracts
  • insuring the stock, premises, employees and customers
  • compliance with data protection
  • any relevant health and safety regulations

You can find more information on retail business legalities on the UK government website and in our article the cost to open a retail store (add link when published).

Decide on the location of your retail store

Where will you open your retail store?

The area you choose to open a retail store is key to its success. You need to be in a prominent position where customers will find you so you make plenty of sales. 

Useful tip

High-street rental premises for businesses can be expensive. Research the area you plan to open in at different times of the day and see if there are other options available, e.g. a courtyard where people meet for coffee, in a small shopping centre, near places where people wait such as bus stops or schools.

Should you also have an online retail store?

If you’re opening a retail store online, you’ll save money paying rent on premises, but you’ll have to market your store, so it stands out from the thousands of other online businesses (remember the USP we mentioned above?)

Prepare your stock and range

Ordering the stock

This is the exciting part of creating a retail store. You’ve got your business plan and plenty of ideas so now it’s time to order your stock and create sales. 

Make sure you place your orders early, so you have a full range on the launch date. If you’re ordering from abroad, you could find that lead times are longer than you expect. 

Store planning

Design a store layout to maximise space and entice customers. Your stop window is crucial to attract potential buyers, whether you have a physical store or a website (the home page of which is your shop window). Use clear POS (point of sale) material to highlight special offers and USPs (e.g. organically sourced products).

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Create a marketing plan for your retail store

Write a detailed marketing plan

When your store is almost ready to launch you need a marketing plan to raise the profile. Don’t do this too late as you’ll miss out on potential sales. Set out a plan for the next 12 months. 

Network and spread the word wherever you can, from the school playground to the supermarket, and make sure everyone knows about your business.

What to include in the marketing plan & Marketing plan ideas

  • Invite people to a launch party (including the local press via a press release)
  • Research data
  • Send out flyers and put up posters
  • Announce your retail store on social media
  • Give discounts and special offers during the first month of trading
  • Arrange competitions and prize draws with local businesses
  • Set up a website and gather email addresses by adding a newsletter button
  • Write a blog once a month and publish it online to keep people interested in your store

Useful tip

Always have several business cards with you. You never know when you may meet potential customers.

When you open a retail store you have to keep everything moving. Set time aside each week and month to follow up on your marketing plan, your business plan and the finances. This will ensure your retail store grows and is a success. 

If you’re opening a retail store we’d like to help. Join our Ankorstart support programme for free advice and guidance on setting up your store. 

FAQ

Where can I get financial help to open a retail store?

If you don´t have a large amount of savings, you could talk to your bank about a small business loan. However, the bank will charge you interest so if you have any friends or family willing to give you a loan this will be much cheaper.

What’s the best way to market a retail store?

An ongoing marketing plan is the best way to market a retail store. Organise regular promotions, competitions and special offers to keep people interested. Changing your stock regularly is another way to lure customers as they will always want to know what’s coming next.

How can I make my retail store look different from others?

If you have the budget, it’s advisable to hire the service of an interior designer to create a store people will love to visit. This will only be a one-off cost and is worth the investment to create a stunning environment.

Do I need to state my income to the tax authorities?

Yes – this is essential and if you have a good accountant, they will be able to offset your expenses against your tax payments.

Do only experienced retailers open stores?

No, anyone can do it. If you have the drive and motivation to run your own business and follow the steps above, you can open a retail store with no experience.