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Getting it right the first time ?How to ensure retail store success
By Eric Weinstein
So you have decided to make the plunge. You have decided that the corporate world and the rat race of working for someone else have worn thin. You have decided to go into business for yourself and open your very own retail storefront. Congratulations, your drive and courage must be recognized. But before you count your freedom to financial success as a given, you must realize that in the world of small business, 4 out of 5 businesses fail. In the highly competitive retail space, these percentages can be even higher ?to ensure your chances of success, you must plan and outline the elements of your business to maximize your revenue opportunity. This article is here to help you on your way. Touched upon are the three key aspects that you must make sure you execute properly if your retail business is going to be a great success. As in anything that is an unknown, patience and planning are critical. As you read this article, consider your own situation and your own business model to make sure that you are heading down a path of least resistance. Let's get started?p>Key factor #1 ?Your locationYour location is by far the most crucial factor to drive your store success. You can have the greatest selection of products, the coolest idea, the most talented and friendly staff, but if you are not in a location that receives a high amount of foot traffic throughout the day; your store will crash and burn. Look in your local newspaper for new leasing options at retail stores in high traffic areas in town. Assess the local strip mall landscape to see the incoming traffic within the stores. Look for patterns as it relates to the weekend and weekdays. Assess to see if you would have any direct competitors that would be in clear competition with you. Talk to local government employees within the towns you are considering to see if you can obtain census data. Weigh the benefits of opening a store in an area that has a high growing population versus one that may have tapered off. Factor this information into your expenses model to ultimately make your decision. WHATEVER you do, do not lease a store just because it is in close proximity to your primary residence. This is a clear cut recipe for disaster. Key factor #2 ?Your products and associated marginsWhen deciding what products to sell, a business owner needs to make some clear cut decisions. Go down the specialty route or be a general retailer. Sell products that are geared to consumers only, businesses, or both? Source products domestically or within the United States ? One thing is clear when you go down the route of purchasing products ?be conservative with your inventory at first to gauge the levels of success within your customer base.In today's economy, with the advent of Wal-Mart and The Home Depot, a small business may be best served opening up a niche business with a distinct theme. By doing so, your business will more likely appeal to a core segment of customers that will be loyal to your store and come back for subsequent purchases. Examples of this could be a candy boutique or a high end jewelry store that specializes in rare gems.Be careful with product margins. In sectors like electronics, the amount you make on a retail sale will likely only be 15% higher than what you originally paid for the product. This percentage decreases the longer you own the inventory. When possible, consider looking overseas for your products. Attend trade shows and expos that are geared for your potential sector. By sourcing in places such as China or Taiwan , your business will be able to sell products at margins closer to 50-60%, dramatically decreasing your risk associated with holding inventory.Key factor #3 ?Marketing and attracting new customersYour business needs a value proposition, something that differentiates it from everyone else and conveys your core benefits to your customers. If you are starting a business from scratch, as opposed to buying a franchise, crafting and refining your value proposition becomes even more important. Ask yourself one crucial question ?Why would customers want to both come to and buy from my store? Once you have nailed that question, you have identified your value proposition.Now its time to market your business and get the word out to potential customers. Creativity and a little research can go a long way in maximizing the effectiveness your marketing dollars. Think about both traditional media and also emerging media. Newspapers and the radio can be great forms of advertising, but do your customers typically interact with those forms of media? Maybe your customers are prone to using the internet and search based advertising is your best bet. Consider creating a website and hiring a specialist to do search engine optimization for your business. Search engine optimization, or SEO, is the task of constructing your site and executing various elements to make your website rank high in Google or Yahoo.The key to maximizing your marketing investments is to track what works best. In a retail environment, that means simply asking your customers "where did you hear about us". By tracking this data and seeing what works and what does not work, you can shift your spending towards the forms of media that are best driving your store traffic.Your retail journey awaits and is sure to be one of the greatest adventures of your life. Follow the pointers we give above, believe in yourself and have fun ?you will be sure to reach the levels of success that you deserve?/p>
About the Author
Eric Weinstein is Vice President at Specialty Store Services, the leading supplier for retail and video store supplies
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