Are You Thinking About Opening A Store?
Since the beginning of the year, I've spoken with a number of people thinking about opening a retail business. In every case they have made the decision to take their professional lives in a different direction, from working for somebody else to working for themselves, from working in larger organizations to building their own business.
They have cash and a dream, and their experience has taught them they need to be absolutely sure they do it right. Each has been at a different point in their due diligence. Some were at the very early stages in their thinking, others were well down the road to taking concrete steps forward.
We've talked about a lot of things, but the conversations tend to coalesce on some basics. Here are a few:
- If you have a burning desire to open a store, read on. If not, you should think twice right now. If you've got passion, you've got a shot, very possibly a very good shot. If you don't have the passion, you'd probably do better to move on.
- There's no sure thing. If there were, somebody else would have already opened your store in your market. Just because nobody else is already open in your market doesn't necessarily make your idea viable. Your store is going to have to be unique and innovative in order to attract customers, and your execution is going to have to be exquisite.
- Customers can get stuff anywhere. You're not going to be able to compete on price, so you're going to have to offer compelling assortments and a captivating customer experience. Customers won't pay more for stuff, but they will for memorable experiences. Your thinking needs to go beyond what you'll sell, but how you'll create that compelling, captivating, memorable experience.
- Location is important, but not as important as the experience you offer. Think about it; some of the best independent retailers you've shopped with in the past were in the most unlikely places. A customer who will tell their family and friends about your store is more valuable than 1,000 cars driving by. Take your idea and find another retailer who's already doing it in another area. Visit them several times. What do they do well, what could you improve upon, what ideas can you apply to your own business? Will they talk to you? While you're at it, start shopping the best independent retailers you can find, regardless of what they sell. What makes them so good? What idea's can you ‘borrow' from them?
- Take several of the key categories you would carry, find out who the key vendors are, and go talk to them (a trade show is great for this). Share your idea with them, including where you're thinking of opening, and how much you're prepared to invest. Once you've got their ear, learn about their lines, pricing and terms, and pick their brain about what makes a retailer successful with their merchandise. Ask if they will introduce you to some of their more successful accounts (who wouldn't be direct competitors) so you could talk to them directly.
- You'll need to meet as many potential customers as you can, personally, before you open. You will need to leverage your personal network to begin building a network of potential customers. In the current environment, you cannot afford to build your business slowly. You've got to hit the ground running.
- You will need a detailed financial plan. You're not going to sell as much in the first year as you think you will, and you're going to need more cash than you think. Your margins will be less than you think, and your expenses more. Prudent planning is essential.
These are only a few of the initial considerations that go into opening a successful retail store. The further you get into it, the more considerations that come into play. As with most things, the devil's in the details. But if you've got the passion in your gut, come join us.