How to open a shop
Many business start-ups begin by selling goods online, either through eBay, Etsy or similar platforms. So, how about taking that next step and opening up a retail outlet? We all know that physical shops often also have a digital presence for sales so let's think about it the other way round and find open a shop.
Whilst there are advantages to just selling goods online, such as lower overheads, and no maintenance of premises, there can also be disadvantages such as missing on transactions that take place "in the real world" as people like to see, touch and try things before they buy, people buy on emotion.
It takes commitment to open a shop, and it can be costly and legally binding in terms of a lease. You need to ensure you have the right location to operate from, if it is the right amount of footfall and looking closely at other retailers in the area.
Give consideration to the aesthetics of the shop to ensure it attracts customers. Think about the stock levels you will need and how to do stock checks and rotation of goods on display. You will need to be able to fulfil the customer’s order immediately or you could lose the sale.
Also consider the staffing issues that appear when you open a shop. Are you going to be there all the time or will you employ someone? You can’t always be in the store, you’ll likely be out and about, going to wholesalers, the bank, suppliers, trade shows, and importantly, you’ll need to have some down time. As an employer, you’ll need to think paying wages, employer’s liability insurance, contracts of employment etc.
You have an advantage for opening your shop, as you already know which products are your best sellers. This reduces the risk of having unsold stock sat in the store. You’ll also understand the seasonality associated with your products and have gained a good insight into buying trends. This enables you to estimate more accurately your stock levels. The information you have gathered from selling goods online should be analysed closely as this is the evidence that gives you the confidence to open a shop in the real world.
How to open a shop: top tips
Location - make sure the area is suitable, take your time and visit at different times of the day to see the footfall. Is there suitable, affordable parking close by to make access easy for your customers.
Lease - how long is the lease for? Is there an opt out clause? What are the restrictions? Can you sub-let? There is a lot to consider and we would suggest seeking legal advice before you sign.
Size - make sure you have sufficient space, customers need to feel free to wander around not confined in a cramped area. What about storage for stock, is there space away from the retail area? Is there a delivery bay or restrictions on when deliveries can be made?
Insurance - public liability, employers liability, stock, building, business interruption are some of the insurances to consider, seek advice from a broker or business support specialist.
Marketing - Have an opening day, use social media and leaflets to shout about it! Remember, you window needs to draw people to your premises. Have notices in the window to say you are opening, use it as a countdown to the big day. Consider special opening offers.
It can be costly to open a shop, so it is vital to have a solid and realistic business plan and cash flow forecast to make sure it is the right thing for you. Think about signage, rates, tills, deposit, lease, staffing, security systems etc.
The cash flow forecast can be based on your eCommerce sales and this should give confidence to both yourself and the funding body that you will be able to meet repayments. Remember to include your repayments on the cash flow.
When you open a shop, it is a giant leap from purely selling goods online, so make sure you do the research, seek advice, make sure you are in the right location, utilise the services of a window dressing expert that will really make your premises stand out from the rest.
Anyone who has a retail outlet will tell you it is not just a case of opening at 9 and closing at 5. You have to consider all the logistics of stock purchase, taking delivery visiting suppliers, keeping the premises in tip top condition and welcoming to your customers.
So, if you are going to take the leap of faith and go from working from home or selling goods online do your research, seek advice and make sure you are in the right location with plenty of footfall.
We look forward to seeing you on the High Street.