How to Start a Retail Buisness
- Starting Your Shop or Store
Basics
of Retailing
In the classification of retail stores by
type of operation, approximately 85 percent are single-unit, independent
stores and account for approximately 55 percent of all retail sales. Firms
that operate more than one store amount to approximately 15 percent of the
total store population and they realize about 45 percent of the total
retail sales volume. Included in this 15 percent are those that are termed
non-store retailers, such as mail order firms, house-to-house companies
and vending machine operators.
The Retailer as Purchasing Agent for the Customer
When a retailer opens a store the philosophy should be to serve the
customer; this means that the retailer should be the purchasing agent for
the customer rather than the distributing agent for the manufacturer.
Therefore, from the opening day of the store, merchandise should be
purchased that customers want rather than merchandise that the
manufacturer wants the retailer to carry. When retailers act as purchasing
agents for their customers, they assure themselves a greater probability
of success. Customers like to do business with retailers who serve them
and consider them their most valuable asset.
The Retail Owner/Manager
The sole owner/manager should like people! People are customers, and
they represent "stock in trade." As a representative of customers in the
market, the retailer should purchase for resale those items of merchandise
that customers will buy. They should make certain they associate with
manufacturers, wholesalers, manufacturers' representatives, or their
middlemen, who are responsible, and who will stand behind their
merchandise. The retailer should buy from vendors who believe in the
adage, "No sale final!" This means that the item purchased can be returned
for credit if a customer is not completely satisfied.
Today's retailing is vitally concerned with motivating customers, and
attempting to learn why they purchase one product rather than another of
equal price and quality. Customers today are better informed than ever
before in our history. To do business with these customers requires the
employment of well-educated and articulate individuals. The impact of
poorly trained employees on the present and future image or reputation of
the store can be very damaging.
Another important consideration in today's retailing is the mobility of
customers. Approximately 20 percent of customers move each year. This does
not mean that the customers move out of the city; they may move to another
part of the city, and, in the future, another retail store will receive
their business. This is important to the retailer because he or she should
always be adding new customers. If retailers fail to replace this 20
percent who move with new customers, they may soon find themselves without
an adequate customer base, and this may cause them to fail.
Another aspect of mobility concerns new and attractive shopping plazas
and malls. Customers often drive many miles to shop in them rather then
doing business locally in an out-of-date, unprogressive retail store. This
is an important consideration when store location or relocation is being
planned.
Planning for the New Store
When a decision finally has been made to open a retail store, the
retailer should make certain he or she possesses sufficient retail
experience in the particular line of merchandise being sold. Far too many
businesspersons believe that because they have sold a certain type of
merchandise for another retailer, they are well qualified to go into
business for themselves. This is a frequent cause of retail failure. There
is much more to becoming a successful retailer than previous retail sales
experience. The buying function for a new retail store requires a
knowledge of the raw materials, manufacturing costs, and an understanding
of the retail value of the item. When purchasing merchandise for resale
the retailer should be a keen judge of what the customer will pay for an
item. The fact that another retailer's customers will pay a higher price
for an item is no logical reason why the same method will be successful
for someone else.
Financial Needs
It is necessary to acquire capital to carry the retailer through a
minimum of two to three years of operation. Many large retail firms
believe that it requires three to four years before a new store will
return a profit. The cash-flow position should be of concern because
without sufficient cash coming into the business it is not possible to
take advantage of "good buys" from vendors or to pay invoices in the cash
discount period. Expenses continue, and should be cut when daily sales
decline, or when the business is closed because of floods, strikes, or
other unforeseen emergencies.
The retailer's largest item of expense is for personnel, and a close
control on the productivity of each employee should be maintained. The
small retailer cannot afford the luxury of specialists who are capable
only of performing certain tasks; most small retailers employ those
individuals who can be used in many different parts of the store. The
motivation of employees rests on the retailer, and every attempt should be
made to understand what makes employees productive and assist them in
their desire to perform to the best of their abilities.
Tips for Retailers
One problem that creates difficulty for small retailers is their
reluctance to visit trade shows, or to visit the market occasionally in
order to see what other retailers and manufacturers are doing. Retailers
who do not attend trade shows are sincere in wanting to stay close to
their business; however, they fail to realize their customers prefer to
shop with those merchants who are progressive, not only in their
merchandising offerings, but in their store layout, fixtures, and over-all
environment. The small retailer should pay periodic visits to other
successful merchants in larger cities, visit the market centers
occasionally to see what other vendors are offering, and visit "key"
manufacturers with whom they do business.
In summary, small retailers should make stores exciting places to do
business. Remember - if retailers want a captive audience, they must
captivate the customer!
Food For Thought
As the pace of life becomes faster, as
markets become more segmented, as tools become more sophisticated, and
as individuals become more interconnected, the need for creativity is
greater than ever before.
Creativity has two distinct processes, and each one is vital.
First is the process of integration and synthesis of a new idea.
Everything new that is created -- great buildings, works of art,
businesses, complex machines, books, films -- must first exist in the
mind. New ideas come largely from the integration of existing concepts
-- combining and intermingling them in ways that have never before
been expressed. This part of the creative process requires exposure to
a diverse set of experiences and a broad spectrum of thinking.
Just as vital to creativity is the action necessary to bring ideas to
reality. The creation of great architecture demands engineering and
construction skills. The creation of great literature demands
grammatical skills, and the ability to operate a printing press.
Discipline and focus are necessary to manifest any creation.
It's a bit of a paradox. In order to be fully creative, we must be
very open-minded, while at the same time remaining disciplined and
focused. A delicate balance, indeed. And balance is the key. In all
great creations the idealistic coexists with the pragmatic in an
elegant proportion. A great idea is worthless unless it is manifest.
And a great skill is useless unless it has direction.
Think balance. Learn to be a dreamer while also being a doer. Harness
the power of your thoughts and the power of your actions together in
the same direction, and your life will be a truly creative force.
The person who can help you the most is YOU. The person who knows you
best, and who most completely has your best interest at heart, is YOU.
You have within you the power to make your life anything you want it
to be.
What do you care about? What is your passion? How are you making a
difference? Are you drifting aimlessly from day to day, or are you
focused on a clear direction?
Don't worry about things that are beyond your control. Your worrying
won't make them any better. And it will waste the energy you could use
to change things that you CAN control.
Take aim, take control and take action today. It doesn't have to be
perfect. It just needs to be done. Use your own unique talents and
abilities, and follow your own dream. If you don't, nobody else will.
Things are the way they are. You are the person you are. You life is
the way it is. You can either accept these things, or make yourself
miserable about them.
There are no doubt many things you think you should have done, and
many other things you wish you had not done. Accept these things. You
cannot change them by pretending they did or didn't happen.
Take a deep breath. Relax. Accept the person you are. Accept the
people and the world around you.
Acceptance doesn't mean being passive. If there's something you want
to change, then take action to change it. Acceptance doesn't mean that
you approve of or support something. It just means that you see it for
what it is. That you don't deceive yourself about it.
Acceptance will help you to see clearly, to learn and to grow. Think
of a baby learning to walk. When he stumbles and falls, he doesn't get
depressed, or paranoid, or embarrassed, or angry. He doesn't develop a
guilt complex, or ulcers, or high blood pressure. He doesn't try to
pretend like the fall didn't happen. He simply pulls himself up on the
nearest supporting object. He enthusiastically tries again, accepting
the fact that he'll have to fall many times before learning to walk.
In an environment of acceptance, true learning and growth takes place.
Bring peace, patience, learning and accomplishment to your life by
practicing acceptance.
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