Reducing the risks involved in opening a retail business

by Startacus Admin

Retail can be a volatile industry to be in. Although it is, and always has been, a driving force in the world’s economy, there are always a number of challengers for retailers.

Do you open an online store, or physical store, or both? How will you manage stock? What makes you a better choice than your competitors? Will people actually want to buy your stuff? Will they even know you resist, in what is almost certainly an already crowded marketplace?

Amid all of that, one might wonder why anyone would want to open a new retail business. But if it’s your dream, you believe in what you’re doing, and you have the confidence, the chops and the know-how to push it through - go for it. 

The risks are real but not insurmountable. If you’re aware of them, you can minimise the risks and give your retail business every chance of success. Here are the likely pain points to consider. 

Getting your pricing right

This isn’t easy. Working out how to price your goods needs careful judgement. If you have competitors, you need to make sure your price isn’t significantly far away from theirs, unless you offer a unique selling point. Don’t price yourself out of the market but avoid underselling yourself - most importantly, of course, you need to make a decent profit on your items or there’s little point in going into the business in the first place.

Don’t forget that prices can be flexible. Regularly reviews yours and adjust them if required.

Stay on top of your accounts

You might have a brilliant idea, be an inspiring visionary, and market your business perfectly - but if you can’t stay on top of your accounts and sales transactions, you’ll run into issues at some point. Not many people are natural accountants - most aren’t - but technology has moved on at a pace and point of sale platforms make the process smooth and largely problem free. Look to partner up with a system and your business will benefit.

Speak to your customers

Ultimately, your customers hold the key to the success or failure of your business, so be good to them. Don’t neglect them. Open up a dialogue with them through social media, responding to queries swiftly and dealing with any complaints amicably and efficiently. A good tip from Entrepreneur is to avoid spreading yourself too thin on social media. Don’t launch several accounts at once, test a couple first and go from there.

Unorganised displays

If you have a physical retail store, make sure it’s well organised, ordered and displays merchandise properly. Don’t cram stuff on them, either. Thinking the more products you display, the more you will, sell is wrong. Messy and overflowing shelves don’t look appealing to buyers. Retail displays need to be organised and attention needs to be drawn to new products or sale items. Keep an eye on your stock and refill your limited items to avoid your fixtures looking bare.

Don’t panic

Set your expectations realistically. It’s highly unlikely you’ll be up and running and absolutely flying when you launch your start-up business. The first few months, possibly the first year, will be tough, while you establish yourself. If things don’t go according to plan early on, don’t completely ditch the plan. Some tweaks to working processes are fine but throwing everything out of the window may only lead to disaster. Believe in your vision and see it through.

 

 

 

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Published on: 19th April 2018