Last Updated on November 28, 2023 by Asfa Rasheed
Retail is the art of buying goods in bulk (some big or niche retailers produce their own goods) and then selling these goods to the general public and making a profit as you do so. It is fast-paced and ever-changing, having to bow to the whims and demands of the public at any given time. Developing any successful retail business will also require you to have a serious business plan. You need to have direction and the plan must have the following aspects at its core.
To run a successful retail business, you need to consider your logistics. If you are unable to get your products from your warehouse to your stores, you will encounter a big issue quickly. It can be hard to predict how much it will cost for a lorry, trailer, staff, maintenance, and fuel. Thankfully, you have several options to consider. Before committing to hiring your own staff and purchasing a lorry, you may want to research the cost of outsourcing your logistics. In some cases, this is more cost-effective due to economies of scale. On the other hand, if you do decide to ‘in-house’ your logistics processes, you should consider a petrol card or diesel fuel card to help reduce the cost of fuel.
How do you intend to make a profit? The margins are what you make after deducting the price of the goods or services that you supply to your customers. This will determine how many items you need to sell to make enough to stay in business. Determine what the margins are that you need to achieve to stay competitive and don’t sell below this price point.
You need numbers. To build up your customer numbers you will need a clear plan to drive consumer loyalty and encourage increased sales. Having a great idea or product that only a few people know about or buy into isn’t going to be sufficient to build a credible and sustainable business upon. You will need masses of people to be interested, buy the products or services that you have on offer, and then to do this over the long term.
Yes, you will need capital to start and initiate a successful retail enterprise. Money to buy or produce the initial batch of stock, do the marketing, and hire the people to get you going. You need to be careful as to where you find this money and keep in mind that there is inherent risk wherever you get the start-up finance from. You need to look for the best lending rates or save your own money to start the enterprise. Many small retail establishments started from the garage of the owner and a simple means of posting or couriering the goods out to their buyers. There’s nothing wrong with starting small and building the business as you go.
Unless you have a specific goal and milestones to help you get there, then it’s going to be near impossible to develop a successful business. It’s tricky to predict or predetermine the market or trends therein and, as such, today’s big business ideas or trending products could be tomorrow’s failed attempt. You will need to be motivated and strong-willed to make a success of any retail business.
Every business will need the right mechanisms in place to run successfully. This will range from the systems to procure or produce the goods to the means of getting these to market and then onwards to the end user.
These are the means with which to approach the establishment and development of any retail business. They are all simple when considered in isolation, but implemented together, these tools or ways of thinking will serve to set the basis or groundwork for a successful stint in retail.